Almost one in three expect household spending to increase in the next three months

^{15 July 2024}

New research by StepChange Debt Charity ahead of the school summer holidays reveals that almost one in three (29%), equivalent to around 15.5m people, expect their household spending to increase over the next few months, including 31% of parents with children aged 18 and under.

Of those saying their household spending will increase in the next few months, four in five (80%) say this is because they expect to spend more on essential costs such as rent, food and bills. Almost one in three (30%) say it is due to spending more on holidays, events and activities.

Meanwhile, despite inflation falling to the target 2%, the new figures show that one in five (22%) people who use credit are currently borrowing more than they did 12 months ago. This rises to one in three (32%) parents with children aged 18 and under.

The figures come as StepChange launches a new summer campaign around credit confidence, informing consumers of what to be mindful of surrounding borrowing and credit use, and how to avoid spiralling fees and potential debt problems.

StepChange is highlighting that while credit can be a useful budgeting tool it can make someone's financial situation worse in the long-term. The charity has shared a five-step checklist for consumers around what to be mindful of when taking out credit:

1. Borrow from trusted companies

Search online for the 'FCA register'. The company should be listed and check the small print as they should have permission to offer loans. Beware of illegal money lenders, also called 'loan sharks'.

2. Watch out for interest and fees

Find out what the 'Annual Percentage Rate' (APR) is. This is a rate that helps you understand the total cost of borrowing, and it takes into account the interest rate and charges. Avoid credit cards and loans with high interest rates as the amount you need to pay back can rise quickly.

3. Make a budget

Paying back what you owe each month can help to build up a good credit history, showing you are a low risk to lend to. It will help to make a monthly budget so you can see what you can afford to pay back. Make sure you are covering your priorities, like your mortgage, rent, energy bills and council tax. Get started by taking a look at StepChange's budget templates.

4. Keep tabs on Buy Now Pay Later

Buy Now Pay Later (BNPL) spreads the cost over a longer period. There might not be interest to pay, but BNPL is still a loan. Repayments can stack up, and you can be charged high fees and interest if you fall behind.

5. Help is at hand

If you need to use credit to get by until payday, to cover essentials, if you are struggling to make repayments, or being charged for late repayments, they are signs you need help. If you're struggling with credit debt, StepChange's advice is free, so why wait.

Vikki Brownridge, Chief Executive at StepChange Debt Charity, said:

"With the summer in full swing, and people start to head off on holiday or see their expenses increase due to kids being at home, we know credit may be useful for those extra costs. However, the credit market can be complicated, between how readily available expensive credit is, to lenders offering people too much credit, there's a real risk that those who are struggling may end up borrowing more than they can afford.

"Pressures brought on by the cost of living crisis are also far from over, with many still struggling to cover regular bills and credit commitments.

"Even with interest-free credit such as BNPL, not keeping on top of payments could lead to late fees and charges. If you are worried about meeting credit repayments, it's important not to wait to get help, speak to your lender who will offer tailored support and guidance. At StepChange, we offer completely free and non-judgmental debt advice, and can walk you through your options for dealing with your debt."

Notes to Editors

1. Find out more about StepChange’s Credit Confidence campaign here.
2. All figures, unless otherwise stated, are from YouGov Plc.  Total sample size was 2,082 adults. Fieldwork was undertaken between 1st - 2nd July 2024.  The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+).
3. 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.
4. Case studies are available on request – please contact the press office.