||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||| Consumer Credit Household stress
Continued rise in borrowing a sign of “mounting pressure” on household budgets
Joanna Elson Chief executive, the Money Advice Trust
The Bank of England last month published its latest Money and Credit fi gures showing consumer credit growth increased to 5.2% in March 2022 from 4.5% in February 2022. The annual growth rate of borrowing on credit cards was 10.6 percent. Outstanding balances for consumer credit
stand at £200.8bn. Research from the Money Advice Trust,
the charity that runs National Debtline and Business Debtline found that: One in four (25%) UK adults have used credit to pay for bills or essentials, such as food, water, rent, council tax and energy in the last three months. One in fi ve (19%) expect to have to borrow money to pay for essentials in the next three months. One in 10 (10%) have borrowed from family and friends as a result of rising costs.
These fi gures, showing consumer credit
Set against a backdrop of soaring energy costs and infl ation at a 30-year high, our concern is that more people are having to turn to credit to plug gaps in their budget. The risk is that this could be storing up problems further down the line if repayments are unable to be met
The fi ndings were based on an Opinium
survey of more than 2,000 UK adults looking at the diffi culties households are facing to meet rising costs.
borrowing continuing to rise, may be a sign of the mounting pressure on household budgets. Set against a backdrop of soaring energy
costs and infl ation at a 30-year high, our concern is that more people are having to turn to credit to plug gaps in their budget. The risk is that this could be storing up
problems further down the line if repayments are unable to be met. For households who are already in fi nancial
diffi culty and whose incomes are unable to keep pace with rising costs, the situation is more urgent. Further support is needed now, including signifi cantly uprating benefi ts and targeted help for people struggling with rising energy bills. Anyone worried about their fi nances should
seek free, independent debt advice as soon as possible. CCR
In Focus
May 2022
www.CCRMagazine.com
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