Research conducted by a private firm has suggested that a large number of families in the UK are struggling with rising personal debt as unsecured borrowing goes up amid the cost of living crisis. The shocking survey stated that the increasing cost of living has pushed many to borrow even to pay for essentials such as food and energy, a news report claimed.
With the growing economic pressure, experts have raised an alarm adding that nearly nine million adults are “financially fragile”.
The survey conducted by the accountants PwC found that the total amount of unsecured debt – which does not include mortgages – across the UK has topped £400billion.
As families borrow just to make ends meet, the average amount of unsecured debt has risen by more than £1,000 – or 7.2 percent – in the past year alone.
The rise in “financial fragility”, defined as those who may need to use their overdraft just to cover essentials, comes after families saw their real incomes fall steadily throughout 2022.
Isabelle Jenkins, leader of financial services at PwC UK described the record personal debt level of £16,200 was described as “startling”.
Ms. Jenkins told MailOnline: “For most borrowers, credit performs an important function – smoothing income and expenditure which, if affordable, can be beneficial.
“However, unaffordable lending and borrowing can cause real harm to individuals and society, and vulnerable consumers can be disproportionately affected.”
The research from PwC and credit app TotallyMoney also showed that 20.2 million adults are now likely to be “locked out” of mainstream banking services, for example, because they have a poor credit history.
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Household energy spending will jump by a record £900 to an average £2,450 in 2023, up from £1,550 this year.
Meanwhile, income tax thresholds have been frozen by the chancellor, Jeremy Hunt, meaning as average pay rises, so will the proportion handed over to the Treasury.
