Almost one in five (18%) of those who have had to remortgage onto a higher rate since the end of 2022 have "poor" or "very poor" financial resilience, Hargreaves Lansdown (HL) has revealed.

The firm’s savings and resilience barometer for July found that this compares to just one in eight (12%) of those who have yet to refinance.

HL said that around 1.5 million people will need to remortgage throughout 2024, and those that have already have £315 left at the end of the month. This is £95 less than those who are yet to remortgage.

The firm found that most of those remortgaging are moving to deals that were costing them less than 3% to rates which are just shy of 6% on an average of two-year fixes.

However, HL said that situations may be better going forward for remortgagers.

Head of personal finance at HL, Sarah Coles, said: "Things are actually looking marginally brighter for remortgagers in the coming months. Those on fixed deals have been shielded from the worst of things so far. Since the start of the decade, they’ve seen the largest increases in their resilience scores, because so far they’ve benefited from wage rises, and have not yet paid the price of higher monthly mortgage payments.

"Those who have yet to remortgage are also likely to be on slightly higher rates than those who have done so since 2022 – and they’re remortgaging onto rates that are down from the peak. Those who remortgage in the next six months or so are likely to be moving from a rate of 2%-2.5% to one that's currently closing in on 5%. It means the jump in rates is going to be painful, but they don’t have quite the same gap to clear as those who came before them – who faced a rise from less than 2% to more than 6.5% in some instances."

However, HL said that this situation is worse for renters. Certain renter groups, including those with children (99.6%) and those aged 50 and over (64%), are deemed to be struggling, falling into the "poor" or "very poor" categories.

Coles added: "While life may get easier for those with mortgages as rates ease, the same can’t be said for renters. They’re still facing rising rents, as tenant numbers keep increasing and landlords continue to sell up. It means people need to manage their finances carefully in order to stay on an even keel.

"Drawing up a budget will be essential, so you can see everything coming in and everything you’re spending. As your rent rises, you’re faced with the horrible challenge of either freeing up money elsewhere by cutting back, or making compromises over where you’re prepared to live.

"By this stage, after rents have risen so far, there’s a risk there are no more costs to cut, so you need to consider real lifestyle changes – either moving somewhere smaller and cheaper, or cutting back on those things you have always considered to be the bare minimum. It's hard enough to manage your day-to-day costs, but you can’t afford to overlook saving for the future too."

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