Citizens Advice Service chief Phil Stewart is urging people to beware of online scams as the cost of living crisis bites deeper.
The warning was issued in the wake of a report that revealed many householders have no financial safety net of little or no savings to cope with a wave of energy bills, fuel costs and food shopping prices.
Mr Stewart, chief executive of Dumfries and Galloway Citizens Advice Service, said: “This is a very compelling survey that adds to the evidence that the perfect storm we are enduring with rising costs is hitting households hard.
“We have seen our monthly client contacts double over the last three months off the back of these rising costs and it looks as though these will continue to rise in the foreseeable future given the continuation of the war in Ukraine and the volatility of the pound probably sending interest rates rising further.”
He added: “Our clients are telling us that they are having to use their savings to afford the basics and unmanageable debt is rising.
“My fear is that householders researching support mechanisms on the internet will fall for online scams or companies who will charge for services that you can get for free through providers such as the local authority or your local citizens advice bureau.
“At D&G CAS we have added a number of links to a cost of living page on our website.
“These may save you money or point you toward getting the help, support, advice and other entitlements you may qualify for.
“For those that cannot access the internet then please call us or drop in to one of our bureaux.”
The report, compiled by Legal and General, disclosed that the average working household has £2,400 in savings – the equivalent of less than a month’s worth of basic expenses.
And most savers say they will fall back on their rainy-day funds to meet rising living costs
Working families estimate they need £12,100 in the bank to feel financially secure but less than a third of households have this set aside.
It is reckoned that it would take the average household three years to put aside the desired financial safety net
And more than one in four working households with savings, 28 per cent, have started dipping into them to meet rising living costs, according to the report plus a further 30 per cent anticipate they will need to do so in the next year.
With consumer prices 10 per cent higher in July 2022 than a year before and with annual household energy costs set to rise to an average of £2,500 in October 2023, many households will likely have to rely even more on the money they have tucked away. And it could wipe out household savings built up during the pandemic.
There is also a growing number of people who cannot put aside any money.
Figures reveal that nearly 1.9 million households have no money left at the end of the month, an increase of 330,000 since 2020. This is likely why 16 per cent of households have no savings at all in case of emergency.
Bernie Hickman, chief executive of Legal & General Retail, said: “With the cost of basic essentials on the rise many households will find themselves having to make difficult choices and dipping into savings is likely to become more common.
“This is a far cry from the five-month financial safety net that people hope for.
“It can be concerning for people to feel like they have nothing to fall back on in times of difficulty.
“While dipping into savings is inevitable for some, there are also steps people can take to try to control their costs as much as possible by checking their regular outgoings and subscriptions, shopping around for discounts and deals and by making sure they are taking up free financial guidance services like MoneyHelper.
