Consumers struggle with cost of living

One in three people say they are currently living with debt and the same number admit to feeling more worried about their finances this year than last year, a national survey commissioned by The Salvation Army has found.

The survey of 2,000 people across the UK showed nearly 70 percent reported going over budgets set for holidays, leisure activities and shopping and more than a quarter of people find it harder to afford their bills in January than any other month in the year, with one in four saying they were left in debt in January due to their December spending.

The Salvation Army, which operates an expanding debt advice service, opened almost 70 percent more cases during the second six months of 2018 compared with the first six months of that year. Its service saw its clients’ personal debt grow year-on-year with a nine percent increase at the end of 2018 compared with 2017.

This comes at a time when national statistics suggest unemployment is down and wages are up, yet more than a third of The Salvation Army’s clients are in work. The research commissioned by the church and charity highlighted younger people are significantly impacted by debt, with those aged 25-34 almost three times more likely to be in debt in January due to their spending in December. Almost half of 25-34s live with debt (compared with a national average of just over a third); credit card debts (69 percent), payday loans (51 percent) and overdraft (40 percent) being the three most common debts.

In addition, the poll identified that before seeking professional advice, men would be most likely to turn to their banks for help if in debt (43 percent compared to 29 percent of women) while women would be most likely to turn to a family member for help (46 percent compared to 39 percent of men).

However, while debt is playing an increasing role in the lives of Brits, one in three people said they wouldn’t tell their loved ones about being in debt, showing a concerning tendency for people to keep their financial struggles to themselves.

The Salvation Army operates a free not-for-profit debt advice service and is encouraging people to speak out and seek advice to manage their debts instead of turning to further credit or struggling alone.

Lorraine Cook, who heads up the service, says debt can happen to anyone and everyone through job loss, illness, bereavement, relationship breakdowns and other unforeseen changes.  “We see a variety of people come into our service. Many have experienced delays in Universal Credit which has left them in debt. We also have a large client group who are in work but simply can’t keep up with the cost of living and therefore struggle to meet essential costs such as rent or council tax.”

“Debt can affect a person’s ability to make choices, impact their relationships, as well as their physical and mental wellbeing.”