You are here: Home - Mortgages - Buy To Let - News -

Brits rely on loans to pay mortgage or rent

Written by: Adam Williams
Around 4 per cent of Brits rely on credit cards and other loans to pay off their rent or mortgage each month, new figures suggest.

Research by price comparison website Money Supermarket found people in the UK are increasingly relying on taking credit from one source in order to pay down debt from another.

It said around 4 per cent of people fall back on credit to pay for their mortgage or rent when payments are due. Almost two-fifths of adults in some form of debt admitted they rely on unsecured credit in order to get by each day. An estimated 33 million adults have access to unsecured borrowing like overdrafts, credit cards and other types of loan – representing 66 per cent of the total adult population.

Of these, 13 million (25 per cent) said they would have to take on more debt over the course of the year. This compares with 9 million a year ago, suggesting the moderate improvements to Britain’s economic outlook are yet to filter through to ordinary people.

Young people aged between 18 and 34 year old were the most likely to use such loans, with 58 per cent admitting they need credit to cover their costs. Kevin Mountford, head of banking at Money Supermarket, said people had to try avoid getting into a debt spiral. “While inflation is at an all-time low, and UK debt is expected to fall next year, there is still a long way to go before many consumers are out of trouble,” he said.

“It’s important that those relying on credit keep in control of the situation, so their debt doesn’t spiral out of control. Simply working out a realistic monthly budget and cutting out unnecessary expenditure should be the first step.

“Consumers should also ensure they have the most suitable financial product to get them back to black. For example, consolidating several balances onto a credit card that charges zero per cent on balance transfers will help cut out any extra costs if they can pay the balance back in time. If this is going to be difficult, then a low rate credit card or a low rate loan are other options.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

It’s time to get your finances in shape, and moving your cash savings to a higher paying deal is a good plac...

Everything you need to know about being furloughed

Few people had heard of ‘furlough’ before March 2020, but the coronavirus pandemic thrust the idea of bein...

The experts’ guide to sorting out your personal finances in 2021

From opting to ‘low spend’ months to imposing your own ‘cooling-off period’, industry experts reveal t...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week