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|UK adults have spent £9.7bn on credit so far in 2016|
|Tuesday, 15 March 2016|
Almost three in 10 (29%) UK adults have already used unsecured credit1 in 2016, spending on average £654 per person, equating to £9.7 billion in total so far this year. The new insight comes from a study conducted by short-term credit provider Sunny2, which reveals that the most popular reasons for using credit so far this year have been to pay for essentials such as food (16%), emergency expenses (11%) and utility bills (7%).
This same percentage of UK adults (29%) predicted that they will need to rely on credit to make future non-essential purchases this year – including holidays, dining out at restaurants, and weekends away – predicting they will probably spend an average of £1,356. This will create an additional £19 billion being spent on credit by the end of 2016 as UK adults turn to credit more this year for a mix of essential and non-essential spending.
It has also revealed that younger people are more likely to turn to credit in 2016, with 40% of 18 to 34 year olds saying they have used credit in January or February this year, compared to 30% of 35 to 54 year olds, and only 19% of over 55s.
This leaves seven in ten UK adults (71%) who say they do not plan to use credit cards, loans or overdrafts this year. Meaning, many are planning to save, rather than rely on credit for major purchases. For these people holidays are their main savings priority (42%), followed by home renovations (22%), and 19% planning to spend on essential home repairs.
However, with 2016 already seeing the largest increase in the use of unsecured consumer credit in over a decade, with a 9.1% growth in January 2016 over the same month last year, UK adults may find they end up using more credit this year than they planned.
Scott Greever, MD of Sunny, commented: “The insight into UK adults needing to rely on credit to help pay for essentials and shorter-term financial needs at the start of the year is not surprising given the rising cost of living, with some cities in the UK now being amongst the most expensive in Europe for day to day living costs4.”
“Additionally, now is the time of year when people start to get on top of their finances and think about larger, non-essential purchases. Although many UK adults plan to save for these longer-term priorities, many, specifically younger adults, will still be relying on credit for major purchases. At Sunny, our goal is to help bridge this gap and responsibly serve consumers who have credit needs and little to no savings.”
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