As the school summer holidays approach, new research from StepChange Debt Charity reveals that almost one in three households (29%), or approximately 15.5 million people, expect their spending to increase over the coming months. This trend is particularly evident among parents with children under 18, with 31% foreseeing higher household expenses.
Essential Costs and Summer Activities Drive Spending
The survey highlights that of those expecting a rise in household spending, a significant 80% attribute this to increased spending on essential costs such as rent, food, and bills. Furthermore, 30% of respondents anticipate higher expenditures due to holidays, events, and activities during the summer period.
Vikki Brownridge, Chief Executive at StepChange Debt Charity, commented on the findings:
“With the summer in full swing, and people starting to head off on holiday or see their expenses increase due to kids being at home, we know credit may be useful for those extra costs. However, the credit market can be complicated, between how readily available expensive credit is, to lenders offering people too much credit, there’s a real risk that those who are struggling may end up borrowing more than they can afford.”
Rising Borrowing Amidst Falling Inflation
Despite the recent fall in inflation to the Bank of England’s target of 2%, the study shows that one in five people (22%) using credit are currently borrowing more than they did 12 months ago. This figure rises to 32% among parents with children aged 18 and under. The persistent pressures of the cost-of-living crisis are compelling many to rely more heavily on credit to manage their finances.
StepChange’s Summer Campaign on Credit Confidence
In response to these findings, StepChange has launched a new summer campaign focused on credit confidence. The campaign aims to educate consumers on borrowing and credit use, helping them avoid spiraling fees and potential debt problems.
Brownridge further elaborated on the risks and support available:
“Pressures brought on by the cost of living crisis are also far from over, with many still struggling to cover regular bills and credit commitments. Even with interest-free credit such as BNPL (Buy Now, Pay Later), not keeping on top of payments could lead to late fees and charges. If you are worried about meeting credit repayments, it’s important not to wait to get help. Speak to your lender who will offer tailored support and guidance. At StepChange, we offer completely free and non-judgmental debt advice and can walk you through your options for dealing with your debt.”
Financial Preparedness for Summer Expenses
The anticipated increase in household spending highlights the importance of financial preparedness, particularly during periods of heightened expenditure like the summer holidays. Parents, in particular, face additional financial burdens, balancing the costs of day-to-day essentials with the desire to provide enjoyable experiences for their children.
StepChange’s research underscores the necessity for consumers to be vigilant about their borrowing habits, especially in a credit market where high-interest products are readily available. The charity’s advice campaign aims to empower individuals with the knowledge and tools needed to manage their finances effectively and avoid falling into unmanageable debt.
Navigating the Cost of Living Crisis
The ongoing cost of living crisis continues to affect millions of households, with many individuals struggling to keep up with their regular financial commitments. Even as inflation rates stabilize, the lingering effects of previous financial strains persist. This situation calls for both consumers and lenders to adopt responsible financial practices.
Lenders have a critical role in supporting their customers through these challenging times. By offering flexible payment plans and personalized financial advice, they can help mitigate the risk of defaults and support overall financial stability.
Conclusion
As the summer holidays bring increased financial pressures, it is crucial for households to approach their spending and borrowing with caution. StepChange Debt Charity’s new campaign aims to provide much-needed guidance and support, helping individuals navigate the complexities of the credit market and maintain financial health.
The findings from StepChange’s research serve as a reminder of the importance of financial education and proactive management. With the right support and information, households can better manage their finances, ensuring that the summer period is enjoyed without the added stress of unmanageable debt.
