1 in 5 ‘now using debt to pay for living costs’

A fifth of consumers are now using debt to finance their living costs, with the majority of them struggling to meet repayments, according to a new survey.

The report from uSwitch.com shows seven million people are finding it hard to pay for their debt and six million consumers feel they may not be able to pay their monthly household bills on time over the next six months.

Ann Robinson, director of consumer policy at the company, said: “Short-term debt solutions may be an easy way to fund the cost of living but they can lead to severe debt issues if not managed properly.”

The research was carried out in the lead up to the emergency Budget next week, with people’s biggest fear being a rise in VAT.

If this was to be implemented, the Trades Union Congress believes it would affect poorer people the most as they spend a larger percentage of their disposable income on VAT.

By James Perkins