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The amount of unsecured credit taken on by
consumers rose dramatically to £732m in May according to figures
from the Bank of England.
These point to a large increase in unsecured borrowing by
UK consumers during May 2012. The amount of new borrowing, £732m,
is almost double the amount of new unsecured borrowing taken out in
April (£379m) and above the previous six-month average of
Overdrafts and loans account for the bulk of new borrowing,
increasing by £603m over the month, while credit card borrowing
rose by just £70m.
The increase in unsecured borrowing has given rise to warnings
the overstretched households may be relying on credit to fund their
Joanna Elson, chief executive of the Money Advice Trust, said:
"With inflation continuing to outstrip earnings growth it takes
more and more of our income to put food on the table, travel to
work and power our homes. As a result, people have cut back on
their spending significantly. However, some find they can't cut
back any more, and are borrowing to bridge the gap."
She added: "Borrowing money to pay for essentials is always a
risk as there is rarely a sufficient guarantee you'll be able to
pay the money back under the terms of the borrowing. It is better
to seek independent expert advice to help you budget more
effectively, ensure you are getting all the benefits you're
entitled to, and make sure you are prioritising your bills and debt
If you are struggling to make ends meet, use the Turn2us
Turn2us Benefits Calculator to check your
entitlement to benefits and the Turn2us Grants
Search to check your eligibility for a charitable grant.
See also our Debt information
Money Advice Trust (link opens in a new window)
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