Research released today highlights extent of the cost of living crisis affecting millions across the UK.
The figures, released by the Debt Advisory Centre, reveal that a significant number of people in Britain are struggling to meet everyday living costs. Two and a half million people used credit cards or loans to pay for their utility bills in July, with 3 million - 6% of UK adults - borrowing to pay for food.
The research shows that 18-24 year olds are the worst affected, with almost a fifth (18%) buying food on credit. The figure for 25-34 year olds was 1 in 10. People aged 25-34 and 35-44 were the most likely to have borrowed to pay their utility bills, with 8% of each group having done so in July.
Regional differences were also highlighted. In the North East and Scotland, 10% of people had borrowed to pay for food, making these areas the worst affected. Ten percent of those in the East Midlands, 9% in Northern Ireland and 8% of Londoners had used credit to pay their utility bills.
Ian Williams of the Debt Advisory Centre said:
“The cost of food, gas and electricity has soared over the past few years. Many people use credit cards to buy food every day - sometimes to benefit from loyalty schemes and sometimes just to make ends meet. But unless you pay off your credit card balance in full every month, you are likely to be paying high charges on every pound you borrow. This could easily wipe out any savings you make by shopping carefully.
“The fact that so many people are having to borrow to meet their utility bills during the summer - when heating bills are usually lower - could signal real trouble approaching this winter. Most of us need to borrow a little money from time to time, but borrowing to pay for essentials such as food and utilities could be a sign that you are struggling financially.”
Williams also urged people who think they will struggle to pay their energy bills this winter to contact their provider, to try and make alternative payment arrangements. These figures further highlight the importance of financial education, and responsibility on the part of lenders and energy companies to prevent consumers from falling into a debt spiral.