A quarter of people forced to borrow money for living costs

A quarter of people in the UK are being forced to borrow money to pay their monthly bills, according to new research from uSwitch.com.

The report f…

A quarter of people in the UK are being forced to borrow money to pay their monthly bills, according to new research from uSwitch.com.

The report from the independent price comparison site revealed just how much individuals in the UK are struggling at the hands of rising costs and reduced income.

In response to a Money Advice Service's study, which found more than half of individuals are struggling with debt, it confirmed the cost of essential bills had risen by a quarter in just five years.

Of all necessary services, car insurance (67 per cent), gas (52 per cent), electricity (32 per cent) and petrol (33 per cent) have seen the biggest hikes.

Meanwhile, wages have only risen by six per cent over the same period, although in real terms they have fallen back to 2003 levels. On top of this half of consumers (52 per cent) expect to receive a pay rise in 2013, while the others do not see it happening.

More than one in four people (27 per cent) are being forced to borrow money just to pay their monthly bills and this is causing many to fall into debt as a result of struggling to keep up with repayments.

Michael Ossei, personal finance expert at uSwitch.com, said: "With this in mind, it's vital that people look for the best ways to save money and balance the books. The first step is to look at your household budget to see where you can cut costs. Making sure you are on the best possible deal for your home essentials will help you to ease the financial pain and to beat price rises."

Worryingly, the research found more people are concerned about their finances than their health and 71 per cent say their money issues have worsened since the government came into power.

Income is failing to rise at the same rate as expenses and for this reason many individuals are borrowing money to stay afloat. This can become even harder when lumbered with debt and a consolidation loan could potentially reduce monthly payments to help release funds for essential bills.

By Joe White

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