The Bank of England’s Money and Credit statistics for May show households withdrew £4.6 billion from banks and building societies across the month - the highest level of household withdrawals on record - suggesting an increase in people turning to savings in order to cope with the cost of living.
StepChange’s own client data for May, also released today, shows how the cost of living crisis continues to drive people to the charity for help, with more than one in four (27%) people citing it as their reason for debt.
Richard Lane, Director of External Affairs at StepChange, said:
“This is the latest in a long line of warnings that more and more people are struggling to cope with the cost of living. Whether it’s a sky-high energy bill, a sudden jump in mortgage payments or the gradual increase of the price of the weekly food shop, cost pressures are everywhere and eroding people’s financial headroom, leaving them more vulnerable to harmful borrowing and problem debt.
“Supporting people to build savings and their financial resilience is vital to being able to cope with income shocks, so we would urge lenders to be attuned to early warning signs of financial difficulty and offer support as soon as possible. If anyone is worried about their financial situation, free, impartial advice is available from debt advice organisations like StepChange.”