UK families are desperate for financial support and this will only increase as inflation and living costs soar, a new report revealed.
Over a quarter (27%) of Brits with dependents have said they will need to borrow to survive the winter, according to subscription loan provider Creditspring. The company has seen the number of people seeking affordable credit double since July.
Almost half of people with children under 18 said they couldn’t survive another lockdown, compared to 16% of adults without children.
“Families are feeling the brunt of rising costs during the most expensive time of the year and are becoming increasingly worried how they’re going to survive what is shaping up to be the toughest period since the financial crisis,” said Neil Kadagathur, CEO of Creditspring.
“Inflation and living costs are soaring at the exact moment when the nation needs to tighten the purse-strings,” he said.
“The approaching Christmas period is only going to exacerbate the situation and could be the tipping point that pushes households into debt.”
Creditspring’s research showed almost a quarter (22%) of families with children under 18 have been forced to turn to high-cost loans after being rejected by mainstream lenders. A fifth (20%) of these borrowers have struggled with the expensive repayments.
Some 40% of families with children under 18 said they want more support from banks when making financial decisions and managing money — more than twice as many as adults without children (19%).
Meanwhile, recent figures from the Centre for Economics and Business Research indicate that the average family could be £1,700 ($2,257) worse off next year as UK inflation has now hit 5.1% — the highest rate in a decade. Forecasts suggest it could rise to 5.5% in early 2022.
Kadagathur said banks and financial providers need to ease the pressure on families and increase access to affordable credit
“There are still too many families forced to turn to high-cost lenders who take advantage of their perilous financial position and offer credit with extortionate repayment terms," he said.
This month, Creditspring announced that the number of customers looking to access affordable loans doubled from 50,000 in July to over 100,000 in December — as household finances increasingly struggle.