The latest Money and Credit figures published by the Bank of England today reveal net borrowing of consumer credit by individuals rose to £1.7 billion in June, the highest in more than five years.
Meanwhile StepChange Debt Charity’s latest client data shows client volumes continue to increase year-on-year, with volumes in June 2023 11% higher than June 2022.
Richard Lane, Director of External Affairs at StepChange Debt Charity, said:
“At this point in the cost of living crisis, there will be a significant number of households relying on credit simply to meet the cost of their everyday essentials, and with the Bank of England’s figures showing the highest level of consumer credit borrowing since 2018, we expect the knock on effect to be more people at risk of problem debt.
“The rise in interest rates coupled with inflation will have already had a drastic impact on millions of people’s finances, with both mortgage holders and renters seeing unsustainable jumps in their household budgets. Our advisors are consistently reporting a lack of financial resilience among clients, with many struggling to manage multiple debts across consumer credit and household bills.
“We know that people showing signs of financial difficulty need help as early as possible to prevent them from becoming trapped in a spiral of harmful, unaffordable borrowing. The Consumer Duty, which comes into effect from today, is a chance for lenders to develop appropriate support for their customers and identify when borrowing is becoming unsustainable at the earliest possible stage.”