Rise in borrowing a sign of struggling households running out of options
The Money Advice Trust responds to latest Money and Credit figures
Posted March 29, 2023
Today’s Bank of England Money and Credit figures show consumer credit grew at 7.7 percent in February 2023, up from 7.5 percent in January 2023. The annual growth rate of credit card borrowing, while still high, fell slightly from 13.5 percent to 13.1 percent in February, with outstanding balances for consumer credit now standing at £210.9 billion.
Findings from a survey of callers to National Debtline show that in 2022 one in three (32 percent) said they had used credit to pay for essential household bills, including food and groceries in the last two years.
Jane Tully, director of external affairs at the Money Advice Trust, the charity that runs National Debtline and Business Debtline, said:
“This further rise in consumer credit borrowing is a sign of the strain households are under as costs continue to rise.
“With council tax set to increase in April, and energy and food costs remaining high, people already struggling are running out of options.
“Many are turning to credit to plug gaps in household budgets that simply won’t stretch to cover the essentials.
“And with interest rates rising again, this could be adding more pressure later down the line.
“Anyone worried about their finances should contact a free debt advice service like National Debtline or Business Debtline as soon as possible.”