Bills Are Still One of the Main Reasons for Loan Applications

People the length and breadth of the UK are still struggling to pay their bills as Brexit lumbers on and finances pinch, new figures reveal.

June statistics from the CashLady Consumer Index shows the need to pay regular household bills is one of the top three causes of short term credit borrowing. The implication of this is that increasingly, households are being forced to take on more debt to avoid falling behind on essentials such as utility bills.

Scotland in particular is feeling the pinch, with the total number of loan applications increasing by 4.52% in Edinburgh alone, with the amount requested also increasing by 3.43%.

With figures showing that average monthly income is rising by 2.82-percent, it’s clear that wage growth isn’t keeping pace with the cost of living. In the south, London bucked the trend with a 4.36% reduction in the average loan amount requested, but most Londoners still cited the need to pay household bills as a main reason for needing a short term loan. The rate of borrowing in the capital also crept up in June with 3.3% more applications compared with the previous month.

Those in the Midlands fared much better with Leicester seeing loan applications plunge by 7.73%. This was coupled with a 2.07% reduction in the average loan amount requested. Coventry saw an even bigger drop, with loan applications down 9.75% and the average loan amount falling by 8.86%. In both of these areas, however – as was seen with almost the entirety of the country – bills were one of the top three reasons given for requesting a short term loan.

The only area of the UK where this wasn’t the case was Liverpool, where the average loan request grew by 3.40% in June, but the reasons for needing it were listed as: unexpected expense, special occasion and other expense. Aside from this one area, the figures paint a clear picture: people are finding their bills outstrip their monthly earnings, plunging the nation into a vicious cycle of taking on more debt to stay afloat.

Chris Hackett, Managing Director of MoneyGap said: “These figures are part of a long-term trend, and it is deeply concerning that working people across the country are struggling to meet their basic needs on a monthly basis. Working as a short-term credit broker, we give people the help they need when they are really struggling, and bills are one of the main reasons across the country that people need short-term cash.

“We hope that the insight from our consumer index will highlight the strain that many householders are under.”

To find out more, visit https://www.cashlady.com/city-index.aspx