21 million considering a loan this year

Top plans included buying a new car (23%), paying for a family holiday (18%), or using the money to finance home improvements, but with wide regional and age differences.

The research found that Londoners were more likely to consider a loan than any other UK region (53%), almost twice as many as in the South West (29%) or Yorkshire and Humberside (32%).

Having spent more time in lockdown or the highest Covid tiers than the rest of the UK, those in Wales and the North West were most likely to consider a loan to finance a family holiday (26% and 25%). Meanwhile, people in the East Midlands – the region that enjoyed the strongest house price growth last year[1] – were the most likely to borrow for home improvements (23%).

A new wardrobe appeared to be the priority for the under-25s with just under one in five (18%) of those planning to borrow to buy clothes, twice as many as those financing a holiday (9%). One in six (16%) people aged under 25 were looking to pay off debts and gain control of their finances, while the same proportion (15%) were using the money for their hobbies.

Lockdown has led to a sharp rise those looking for companionship from a pet according to Google searches[2] and the research found that one in twelve expected to take out a loan to buy one.  Londoners (10%) were most likely to be considering a loan to buy an animal, closely followed by animal lovers in the East of England (9%), and the North West (9%).

James Fairclough, Director of AA Financial Services said “Despite a challenging start to 2021 and even with lockdown set to continue for months to come, there is undeniably a sense of optimism especially as vaccines are now being rolled out and that was reflected in our research here.’

“The fact so many have the confidence to start making plans and positive changes to their lives offers clear hope that we have entered the last chapter of this bleak period, and points to happier times in the months ahead.”

“The top priority seems to be buying a car and our research elsewhere suggests that many people are seriously thinking about going electric so perhaps this research is a reflection of that.’

“It certainly seems that lockdown has prompted many people to reassess their priorities and financial affairs. There has been a shift in mind-set that we have seen in our research throughout the last year, as millions of people have had the time to plan projects they had been putting off, pursue interests – whether that be clothes or cocker spaniels – and consider how to finance them.’

Reasons people are considering a loan in 2021