“Ominous signs” as borrowing levels continue to rise

Money Advice Trust responds to Bank of England Money and Credit figures

The Bank of England has today published its latest Money and Credit figures showing consumer credit growth increased to 5.7 percent in April 2022 from 5.2 percent in March.  The annual growth rate of credit card borrowing and other forms of consumer credit was 11.6 percent with outstanding balances for consumer credit now standing at £201.9 billion.

Research from the Money Advice Trust, the charity that runs National Debtline and Business Debtline, showed that in March, and before the energy price cap rise was introduced, one in four (25 percent) UK adults had used credit to pay for bills or essentials including food, water, rent, council tax and energy in the previous three months.

The findings, based on a Opinium survey of more than 2,000 UK adults, showed the difficulties households were already facing trying to meet rising costs:

 Only one in five (20 percent) felt prepared to deal with rising costs.

• One in five (19 percent) UK adults expected to have to borrow money to pay for essentials in the next three months.

 Jane Tully, director of external affairs and partnerships at the Money Advice Trust, the charity that runs National Debtline and Business Debtline, said:

“With consumer credit borrowing continuing to rise, today’s figures are an ominous sign of the mounting pressure on household finances.  Using credit to cover essential costs, like food and energy, is often a sure sign of financial difficulty, and as we see at National Debtline, can lead to difficulties further down the line if repayments are not able to be met.

“The Chancellor’s support measures, announced last week, are welcome and should provide some much-needed relief – and for those already struggling, this cannot come soon enough. It is now vital that this support reaches those most in need without delay.

“I would encourage anyone worried about their finances to contact a free debt advice service like National Debtline as soon as possible.”

 National Debtline provides free, independent debt advice at www.nationaldebtline.org.