TORY COST OF LIVING CRISIS COULD LEAD TO HUGE RISE IN DEBT
Patricia Gibson MP has warned that demand for credit is soaring as households grapple with a Tory cost of living crisis.
The Bank of England has revealed that UK household demand for credit card lending jumped by 41.2% in the final months of 2021, while demand for other unsecured credit and ‘buy now pay’ later products rose by 37.4%.
The Resolution Foundation has warned 2022 will be the ‘year of the squeeze’, with average energy bills expected to rise by around £600 a year.
Patricia has called for urgent measures to help struggling families through the crisis, including a low-income energy payment and reversing the £20 a week Universal Credit cut, and introduction of the Real Living Wage of £9.90 an hour.
Patricia has previously called for action to curb interest rate payments and payday loans, urging the UK Government last year to lower the 100% cap on fees and interest and extend the principle to credit cards and unauthorised overdrafts. She said:
“At a time when households are dealing with the impact of the pandemic, rising inflation, and a cost of living crisis, the last thing they need is the threat of exorbitant credit card debt and interest rate payments.
“The worrying increase in demand for credit shows that household finances are becoming severely stretched. The UK now faces rapidly rising debt as the cost of living is growing too fast for many people to afford while paying off previous debts.
“Without urgent action from the Treasury and an emergency package of measures to support families, households will struggle; a mess the UK Tory Government has caused.
“The Tories must heed the warnings and urgently bring forward support in the form of a low-income energy payment, reverse their £20 a week cut to Universal Credit, and introduce the Real Living Wage of £9.90 an hour.
“The UK already has the highest level of poverty and inequality in northwest Europe. Many more households will slip into deprivation and hardship if Tory inaction continues.”