An additional £1.5bn in consumer credit was borrowed in November compared to October when the net figure borrowed was £0.7bn. This was driven by an additional £1.2bn of credit card borrowing, according to the Bank of England.
AJ Bell’s Suter noted: “These figures will inevitably climb again once December’s numbers are revealed, as a large chunk of the cost of Christmas is put on plastic.”
“On top of that, we saw a big leap in personal loan costs, with the average rate rising to a five-year high, increasing to almost 8 per cent."
“It means those who are pushed into borrowing are being hit with higher costs, which will mean more face a debt spiral as they struggle to keep up with repayments,” Suter said.
Hines noted that she has also seen an increase in clients requesting to borrow extra money for debt consolidation.
Elsewhere, the data also showed that many people continued to save money during November.
Suter described this as “the current divide in the nation”.
Total savings dropped slightly in November, but despite the cost of living pressures saving levels remain dramatically higher than pre-pandemic with £5.7bn deposited in banks and building societies in November.
jane.matthews@ft.com
