Britain’s economy is continuing to put a strain on consumers’ budgets, with research revealing that millions are turning to credit cards and other forms of borrowing to meet monthly bills.
Estimates by Santander show that 7.5 million people use credit cards for essential household spending, while a further one million use payday lenders to make ends meet.
15% of consumers turn to credit cards to balance the books each month, with the average monthly amount borrowed standing at £172 per person and typical APR for credit cards coming in at around 19%.
“In an ideal world, household bills should be one of the first costs to be covered when payday arrives, but as the research highlights, this isn’t always possible,” said Reza Attar-Zadeh, banking director at Santander.”
“The cost of living is going up, driven in part by the rising cost of household bills, and as a result, millions of people are regularly borrowing money to make ends meet which cannot be sustained in the long-run.”
Further findings from the research revealed that younger consumers are more likely to borrow money to cover bills. This figure was 38% for people aged 18 to 34, compared to 30% of those aged 35 to 54 and 17% of over 55s.
Those living in London are also more reliant on borrowing than any other region in the UK, with a 33% doing this in an average month.
In contrast, just 22% of those living in the North East, South West and West Midlands resort to borrowing each month.