The Bank of England has today published its latest Money and Credit figures showing consumer credit growth increased to 4.4% in February 2022 from 3.2% in January 2022. The annual growth rate of credit card borrowing was 9.4% with outstanding balances for consumer credit now standing at £199.5 billion.
Research from the Money Advice Trust, the charity that runs National Debtline and Business Debtline, found that one in four (25 percent) of UK adults have used credit to pay for bills or essentials including food, water, rent, council tax and energy in the last three months.
The findings, based on a Opinium survey of more than 2,000 UK adults, show the difficulties households are already facing trying to meet rising costs:
- One in five (19 percent) UK adults expects to have to borrow money to pay for essentials in the next three months.
- Over a third (34 percent) say they have already cut down on non-essential spending.
- Only one in five (20 percent) feel prepared to deal with 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 a jump in consumer credit borrowing, provide an indicator of the underlying challenges households face in meeting the growing cost of living. Our concern is that more people will be pushed to credit to cover rising bills, which could be storing up problems further down the line when repayments are due.
“Millions of people are already struggling with the cost of energy, fuel and food – and with April’s energy price rise days away and no respite in sight from other rising prices, this test is only going to get far harder.
“While the Government’s council tax and energy bill rebates will help some households to a small degree, more targeted support is needed urgently. As a minimum, this should include significantly uprating benefits and introducing further targeted support to help people struggling with the steep increase in their energy bills.
“The coming months will be a difficult time for millions of people as the mounting pressure on household budgets builds.
“I would encourage anyone worried about their finances to seek free, independent debt advice as soon as possible.”