One in four UK adults have recently borrowed money to pay for essentials

^{20 May 2024}

New research conducted by YouGov on behalf of StepChange Debt Charity reveals that one in four (24%) UK adults have recently used a form of credit to pay for essentials such as household costs and groceries. StepChange’s analysis estimates this is the equivalent of 13 million people.

Analysis shows among the one quarter (24%) of UK adults using credit for essentials, 72% are finding it difficult to keep up with every day household bills and credit commitments. This is the equivalent of nine million people.

For many people, becoming dependent on credit to pay for living costs makes the situation worse as increasing debt and repayments make it even harder to make ends meet.

The polling shows one in five UK adults (20%) have used credit to keep up with credit repayments in the last three months, suggesting they are at risk of becoming stuck in a debt spiral.

The analysis reveals the extent of hardship experienced. Among those who have an outstanding credit balance, and have struggled to keep up with repayments:

• One in two (48%) have been rationing utilities like heating, electricity or water to keep up with repayments
• Almost one in three (29%) have asked for financial help from family or friends to keep up with repayments
• One in eight (16%) have missed utility bills so that they can keep up with repayments
• Over half (55%) have struggled to keep up with credit repayments for more than six months

The survey results also suggest that lenders can exacerbate difficulty by offering more credit. Among those who have struggled to keep up with credit repayments, almost half (45%) have recently been offered more credit. This includes being offered a new credit or store card, a new loan or other form of consumer credit, or had the limit of an existing card increased.

Once someone is in a cycle of borrowing to stay on top of both essentials and credit repayments, difficulties often become deeply entrenched. Struggling with bills and consumer debts can have an overwhelmingly negative impact on someone’s health and wellbeing – 31% of people struggling with repayments say debt negatively affects their physical health and 49% their mental health.

StepChange is calling for action from the FCA, government and lenders to prioritise preventing problem debt among those struggling with living costs.

Peter Tutton, Head of Policy, Research and Public Affairs at StepChange, said:

“It’s not uncommon for someone to rely on credit when they are in a tight spot with their finances, but it’s a real indicator of difficulty if someone is regularly borrowing to cover life’s everyday costs, and it’s at that point where problem debt can escalate quickly.

“The new Consumer Duty has sent a welcome message that the FCA expects higher standards from consumer lenders, but the reality is that as many people as ever are struggling with harmful financial difficulty

“This is a long-standing problem that can be solved through concerted action from the regulator, industry and Government. We want the FCA to make preventing harmful financial difficulty in consumer credit a key focus of the Consumer Duty. This means looking harder at lending rules that make it too easy for people struggling with living costs to slip into serious debt, and working with industry to remove barriers to people in difficulty getting the help they need at an early stage.

“We’d also like to see Government urgently regulate interest-free Buy Now, Pay Later, which is now almost as commonly used overdrafts, and work to scale up safer alternatives to desperation borrowing like a national No-interest Loan Scheme.”

Notes to Editors

1. Find out more about StepChange’s research on preventing harm in consumer credit here.
2. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,116 adults. Fieldwork was undertaken between 8thrd - 9th May 2024. The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+).
3. January polling referenced was also from YouGov Plc, total sample size was 2,096. Fieldwork was undertaken between 13th - 15th January 2024. The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+)
4. Population figures have been estimated using StepChange Debt Charity’s own analysis of the YouGov survey findings. This analysis is based on the Office for National Statistics Mid-Year (March 2024) estimate of the number of adults (18+) in the UK: 53,656,829.