Families are plunging deeper into debt in January
Evidence suggests there are a rising number turning to credit unions, bank loans, payday loans and asking family and friends.
The scale of debt crippling working families in January as heating costs rocket and Christmas bills pile in have been highlighted this month.
Research reveals the surge in desperate households getting deeper into debt between December 2018 and January 2019.
- 16% of those quizzed had turned to credit unions in January, compared with just 4% in December.
- 17% were in their overdraft this month, a hike from 4% the previous month.
- 12% had taken out a bank loan this month, against just 1% in December.
- Those asking family and friends for help rose from 2% to 8% -potentially increasing pressure on already-stretched budgets.
- Those raiding their savings soared from 2% to 9% and workers turning to their “emergency funds” rose from 3% to 4%.
A multitude of factors come into play in January, creating a perfect storm for falling into debt – not only are people paying off their Christmas bills and retailers offering tempting sales, they’re also trying to stretch their December pay over a longer period of time until their next payday in February.
If you are struggling with managing debt, an important first step is to seek free advice as early as possible, which can prevent problems spiralling out of control.