Rising inflation will push millions of families into debt this winter, with 27 per cent saying that they will need to borrow money to survive.
New research from subscription loan provider Creditspring has found that almost half of people with children under 18 couldn’t survive another lockdown. Among adults without children, this figure dropped to 16 per cent. Just five per cent of families with adult children expect to have to borrow to survive.
Creditspring has predicted that the need for more financial support will spike over the coming months, and pointed out that it has seen the number of people seeking affordable credit double since July.
“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, co-founder and chief executive of Creditspring.
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“Families are facing a perfect storm which is going to pile more pressure on budgets. Inflation and living costs are soaring at the exact moment when the nation needs to tighten the purse-strings. The approaching Christmas period is only going to exacerbate the situation and could be the tipping point that pushes households into debt.”
According to recent figures from the Centre for Economics and Business Research, the average family is set to be £1,700 worse off next year.
Creditspring’s research has found that almost a quarter (22 per cent) of families with children under 18 have been forced to turn to high-cost loans after being rejected by mainstream lenders, and 20% of these borrowers have struggled with the expensive repayments.
“Affordable credit has provided an invaluable lifeline for people across the UK however, access to these options remains limited,” added Kadagathur.
“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. With a lack of support, the fear is that the situation could become significantly worse before it gets better.”
In July, Creditspring helped 50,000 consumers access affordable loans, but this figure had risen to more than 100,000 by December.
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