Warning of debt risk as cost of living payments end

Creditfix has issued a warning about the risk of rising consumer debt levels as the final scheduled cost of living payments come to an end this month.

While the Prime Minister recently stated that the cost-of-living pressures are starting to ease, figures from the Joseph Rowntree Foundation’s UK Poverty report paint a different picture. Analysis shows that millions of people on the lowest incomes would need to double their income to escape poverty and it’s now 20 years and six prime ministers since there was a sustained fall in poverty.

Combine this with the results from a survey from personal insolvency provider, Creditfix, which found that 20% of respondents are still struggling to pay their Christmas debts off, and will be until at least March, debt advisors are warning that many throughout the UK will struggle to pay for bills and other essential expenses.

As low-income households across the country begin receiving the final cost of living payment, Creditfix data shows that the average level of unsecured debt across the UK is £19,145.

Maxine McCreadie Content Manager at Creditfix said “We might have the first payday of 2024 under our belts but many are still feeling the pinch after Christmas, not to still trying the current cost of living.

“Without the support of the low-income cost of living payments which come to an end this month, many will be worried about how they can stay on top of your finances throughout the rest of 2024.

“Our survey found that 20% of people will be paying off their Christmas bills until March, whilst some anticipate grappling with these festive debts as far away as December 2024.

“Balancing essential living expenses and debt repayments can become a delicate task. It’s not always easy but through tackling those high-interest debts first, working to build a financial cushion and trimming unnecessary expenses, and, when needed, seeking the support of professionals, it is possible to overcome financial challenges and cultivate positive money habits throughout 2024.”