The number of people using credit cards or personal loans to pay their utility bills has tripled since August last year, according to figures from the Debt Advisory Centre.
In February this year, almost 1 in 5 people (18.9%) said they had used credit cards or personal loans to settle a utility bill. This figure is up from just 5% of people who said the same in August last year, and is equivalent to 9.5 million people using credit to pay for gas, electricity and/or water.
People aged 25-34 - the most likely group to have taken their first step on the property ladder and started a family - were the most likely age group to have paid a utility bill using credit. More than a quarter (26.3%) of this group revealed that they had done so in February to March this year, compared to just 7% of those aged 55 and over.
The figures also highlighted regional differences. More than a third of Londoners said they’d settled bills on credit (36.1%) - a significant increase from the 8% who said the same last August. People living in the South West were the least likely to rely on credit for bills, although 12.4% of people still admitted to doing so.
Ian Williams from the Debt Advisory Centre commented on the findings:
“What’s worrying about these figures isn’t only how much they’ve gone up in just over half a year. It’s also that so many people are having to rely on forms of credit to pay for essential bills.
“Energy prices are rising, which may explain why three times more people are using credit to pay their bills than last summer. However, if the reason households are making use of loans or credit cards to pay for their gas, electricity or water is because they are prioritising paying off other debts, it might be time to seek professional help with getting their finances back on track.”