More UK consumers turn to debt to pay for food and essentials

A growing number of people are struggling with mounting debts because they do not have enough money to pay for food and other essentials, a charity boss warned.

Vikki Brownridge, the new chief executive of StepChange Debt Charity, said there has been a stark increase in the number of working people who have resorted to unmanageable borrowing during the cost-of-living crisis because they “just don’t have enough money available”.

The Leeds-based charity provided advice to 18,000 new clients in January – more than in any month in the previous year. Around a quarter (24 per cent) of them said the increased cost of living is the main reason for their debt.

Across the county, credit card borrowing rose to £1.1bn in January, taking the overall level of consumer credit to £1.6bn, according to figures released by the Bank of England.

Ms Brownridge, who has worked at the charity for 18 years, said most people used to reach out for help after a “life event”, such as a redundancy or a divorce, drove them to debt.

“What we’re seeing a lot more now, particularly since the pandemic and the cost of living crisis, is people are just not able to pay for their essential living costs, like food, energy bills, their mortgage or rent,” she said. “They just don’t have enough money available.

“About a third of the people who come to us just don’t have any money left to pay anything towards their debts.

“Many have got less coming in than going out just paying their essential living costs, so we’re having to refer them to food banks, and it’s not just people who are unemployed.”

People with mortgages and other loans could be put under further pressure in the coming months, as the Bank of England is expected to increase its base rate of interest for the twelfth consecutive time in May – from 4.25 per cent to 4.5 per cent – in a bid to combat inflation.

It dropped to 10.1 per cent in the year to March, but food and nonalcoholic drink prices rose by 19.2 per cent – the sharpest increase in 45 years.

Soaring energy costs have also left around 3.2m households in fuel poverty, but the Government recently extended its energy support scheme, to keep a typical annual bill at £2,500 until June.

Ms Brownridge said that anyone who is struggling with debt should seek help as soon as possible.

“The worst thing you can do is continue to borrow,” she said. “The best thing you can do is reach out to your creditors and reach out to ourselves. There are things that can be done to support and help you.

“Don’t ignore a problem, that’s the worst thing you can do. The first and most important step is reaching out.

“Most people who come to us say they wish they had done it sooner and a weight was lifted after they reached out for help.”

Ms Brownridge, currently director of operations at StepChange, will become chief executive in May, taking over from Phil Andrew.

You can contact StepChange by phoning the charity’s helpline on 0800 138 1111 or visiting its online debt advice service.