Millions of people in the UK are taking out loans just to cover their food costs and pay necessary energy bills, according to a new report by the Circ…
Millions of people in the UK are taking out loans just to cover their food costs and pay necessary energy bills, according to a new report by the Circle Housing Group.
Individuals and families are clearly finding it difficult to make ends meet in the current climate. As inflation continues to rise, wages and benefit payments are not increasing at the same rate, which is forcing people into debt.
The economy may be showing signs of improving but it does not look like this is the case for millions of citizens who, according to the study, are not optimistic about their situation improving any time soon.
Indeed, one in five respondents (21 per cent) took out a loan in the last 12 months, with more than half (56 per cent) of them expecting to do the same in the next year. Worryingly, only eight per cent of the 2,000 participants have not borrowed money this year, showing how serious the debt problem is becoming.
The study revealed a third of individuals (28 per cent) used these loans to pay for food and basic living essentials, while around one in five needed help to cover mortgage and credit payments (21 per cent) or energy bills (17 per cent).
Meanwhile, one in five borrowers took out a loan in the past year to cover one-off transactions, such as replacing essential major appliances like washing machines (20 per cent) or paying for Christmas (19 per cent). Just over a third (34 per cent) of individuals owed money for multiple goods or services, indicating that there are many who have several everyday needs they simply cannot afford.
Matt Earnshaw, group financial inclusion manager at Circle Housing Group, said: "These figures are very concerning and demonstrate the difficulties that many people are currently facing when it comes to managing their day to day finances.
"Our general advice to anyone in this position is to get help right away and deal with the debt quickly."
By Amy White