Reports show that many UK households are turning to credit in order to pay for essentials because their existing income simply does not cover the basics. Recent figures accessed by The Money Charity are showing that people are looking to access other forms of credit. Typical credit figures showed that consumer credit lending to individuals decreased by £93 million, yet other reports show that consumers are needing to borrow to cover their bills in the cost of living crisis. Something does not add up, which leads many experts to surmise that other forms of credit are being accessed.
Between January and June 2022, £5.6 billion was spent on Buy Now Pay Later schemes. There is a definite movement away from the more traditional routes of credit lending and the higher interest rates that may come with them. Credit cards and overdrafts are two of the most expensive forms of credit and these interest rates will have risen in line with the base rate rises implemented by the Bank of England.
Whilst it is not surprising that consumers want to shop around for the best forms of borrowing, it may become concerning if unregulated and unsafe borrowing options are being used.
If the past year has had a negative impact on your financial situation, or you are facing increasing debt costs over the next few months, feel free to call us for a discussion on what debt solutions could be available to suit your personal situation.
