Copy article

Reliance on credit increases - ONS

ended 07. September 2022

The ONS today published a report showing some worrying stats around household finances. Please respond with any thoughts ASAP.  Key findings below:

  • Nearly one in five (19%) adults reported they had to borrow more money or take out more credit in the past month compared with a year ago, while 47% of adults stated they will not be able to save any money in the next 12 months.
  • Over 4 in 10 (45%) adults who pay energy bills found it very or somewhat difficult to afford them; this is the same as the previous period (3 to 14 August).
  • Around 9 in 10 (91%) adults reported their cost of living has increased over the last month; this is an increase since we first started asking this question in the period 3 to 14 November 2021 (62%).
  • Among adults who reported their cost of living has increased over the last month, the most reported reasons were an increase in the price of food shopping (96%), gas or electricity bills (79%) and the price of fuel (71%).
  • Around 8 in 10 (81%) adults reported being very or somewhat worried about rising costs of living in the past two weeks; this is an increase since we first started asking this question in the period 27 April to 8 May 2022 (74%).

6 responses from the Newspage community

Copy all

Copy

Editor
Mike Staton
Director at Staton Mortgages
Unfortunately, i feel we have been the creators of our own downfall in the UK. We have taken for granted how cheap it has been to live in the UK. Interest rates hitting sub 1%, direct access to luxuries that can only be dreamed of in other countries. It is unbelievable when doing a budget plannner with clients, how many of them consider their £140 a month Media package bill as a necessity, or there £130 a month mobile phone bill as something they cant live without. Whilst we are complaining about the hike of energy increases, which i do believe are increasing at a completely unacceptable rate, we should also shoulder some of the blame for the years of impulse buying and frivolous spending we have made which i partly blame for us being in this situation. Due to my thoughts on this, i feel the reliance on credit will only increase whilst people try to maintain there current standard of living at their own detriment
Copy

Editor
Imran Hussain
Director at Harmony Financial Services
The increase is concerning as this is only going to worse with the rise in living costs, and with the move away from ultra-low interest rates and shrinking incomes due to inflation, many working families will have to turn to borrow or have no choice but to strip out any luxuries to keep heads above water so we need to see action from the new prime minister around the cost of utilities which after a mortgage/rent is most peoples highest cost.
Copy

David Robinson
Co-Founder at Wildcat Law
The data shows that: People are worried And for good reason. 81% of adults reporting that they are worried about the rising costs of living with 91% reporting that their cost of living has increased. What is very important is that these figures are going up month on month and the reality is that the cost of living crisis has yet to properly get started. This should send yet more warning bells ringing in Westminster that urgent action is required not only to get control of the issues but almost as importantly to be seen to be getting control of the issues. The leadership election was the governments opportunity to showcase the plethora of ideas they had regarding the looming crisis. Unfortunately they either failed to discuss them publicly or they had none to discuss. Everyone hopes it was the former!
Copy

Graham Wells
Founder and Financial Coach at GroWiser Financial Coaching
It's no surprise that 91% of UK adults have reported a rise in their cost of living. What's more concerning is the increase of people feeling worried about it - from 74% in April / May to 81% in September. This increase in financial anxiety is likely to compound as winter approaches with the additional costs of heating, Christmas and the usual frenzy of 'Black Friday' mayhem. After decades of an increasingly consumerist society, where we're enouraged to spend rather than save, most of us have little "wiggle room" when it comes to balancing the household finances. People will reach for easy credit as a temporary solution and over time, this will add to the anxiety. More than ever, we need to step back and re-assess how we value our money and our time. For most of us, savings can be made by re-prioritising spending habits to be more in line with our values. It takes effort and it's hard to do alone, but speaking with a partner, good friend or coach can help. For those who truly have no financial levels to pull, let's hope that government and wider society steps in for the collective good of us all.
Copy

Joshua Gerstler
Chartered Financial Planner at The Orchard Practice
"It's tough out there for a lot of people. Energy bills is the biggest concern for most as there appears to be no limit on how high these might go. The immediate impact is only part of the worry; the other half is the knowledge that things could get worse. Turning to loans and credit cards may not be the smart thing to do. If you are worried, please speak to a professional."
Copy

Fanny Snaith
Owner at Fanny Snaith - Certified Money Coach
Reliance on credit will be inevitable if your current income is fixed and your out goings are stripped to the bare minimum. When the budget doesn't balance, and we have no personal control over the external things that are challenging us, one solution is to look at ourselves to use our creativity to work out what we can change. Can we change jobs? Upskill so that we can earn more? Maybe set up a side hustle to boost our income. There is no magic wand, BUT our brains are so clever and when put to their full use - amazing ideas are born.