Cash-strapped Britons turn to pawnbroker

RECORD numbers are pawning off prized possessions as the cost- of-living crisis takes its toll.

Britain’s biggest pawnbroker said the level of ‘pledge lending’ – where customers borrow money against valuable items, including watches and jewellery – is at a record high.

H&T Group’s trading update shone a light on the extent to which families are struggling to make ends meet as they grapple with soaring food and energy bills. Inflation is a 40year high of 9.1pc and the UK is facing the biggest fall in living standards since records began in 1956.

Families are also struggling with energy bills that have jumped by 54pc – an average of £693 – this year. They are set to jump a further £800, to an average of £2,800 a year, when energy regulator Ofgem raises the price cap in October. And food price rises could hit 15pc this summer, according to a report from food research firm IGD. H&T – founded in London in 1897 – said yesterday demand for pledge lending has been gathering pace since the start of the year, with volumes 40pc above pre-pandemic levels.

The group’s pledge book at the end of June was £84.2m, up from £48.3m a year earlier.

Shore Capital analyst Gary Greenwood said the soaring demand ‘reflects the impact of the cost of living crisis’.

He added that if current trends continue, H&T’s pledge book could hit £100m by the end of the year as ‘the cost of living crisis is likely to support continued strong demand for pawnbroking services’.

H&T shares jumped 3.4pc, or 11p, to 332.5p yesterday. They have soared by more than 16pc this year as the economic outlook has deteriorated in the wake of Russia’s invasion of Ukraine. It is worth £133m, more than double the £54m it floated at in 2006.

Greenwood said: ‘Their customers are typically people at the lower end of the demographic, struggling to get finance from mainstream banks. Pawnbroking is one of the few places they can go to borrow. Their finances are being squeezed relatively more than most at the moment and they need money. One way to get that is borrowing against a pledgable item.’