Continued rise in borrowing a sign of “mounting pressure” on household budgets
The Bank of England has today published its latest Money and Credit figures showing consumer credit growth increased to 5.2 percent in March 2022 from 4.5 percent in February 2022. The annual growth rate of borrowing on credit cards was 10.6 percent.
Outstanding balances for consumer credit stand at £200.8 billion.
Research from the Money Advice Trust, the charity that runs National Debtline and Business Debtline found that:
- One in four (25 percent) 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 five (19 percent) expect to have to borrow money to pay for essentials in the next three months.
- One in ten (10 percent) have borrowed from family and friends as a result of rising costs.
The findings were based on an Opinium survey of more than 2,000 UK adults looking at the difficulties households are facing to meet rising costs.
Joanna Elson CBE, chief executive of the Money Advice Trust, the charity that runs National Debtline and Business Debtline, said: “Today’s figures, showing consumer credit borrowing continuing to rise, may be a sign of the mounting pressure on household budgets.
“Set against a backdrop of soaring energy costs and inflation at a thirty-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 financial difficulty and whose incomes are unable to keep pace with rising costs, the situation is more urgent. Further support is needed now, including significantly uprating benefits and targeted help for people struggling with rising energy bills.
“Anyone worried about their finances should seek free, independent debt advice as soon as possible.”