Food on credit

As UNITElive reported last week, unsecured debt – such as credit cards and payday loans – has grown exponentially in austerity Britain. A new survey released this week (October 22) has shown just what, exactly, these debts are being used to pay for.

 
The survey conducted by the Debt Advisory Centre found that more than half of Britons – 57 per cent – borrowed money to pay for food, housing or energy and utility bills in the past six months.

 
The Financial Well-Being survey found that of the 2,000 asked, one in three felt they were “struggling” financially and one in five felt their financial situation had worsened over the past year.

 
Even as supermarket price wars have driven costs down, having enough money to put food on the table has become a growing struggle for more and more households – nearly a quarter borrowed money to buy food in the last six months, a number which has doubled from the first six months of the year.

 
Despite a similar dip in fuel prices, many Britons are likewise struggling to pay at the pump – one in 10 said they paid for fuel or car insurance using credit.

 
Gas, electricity and water prices have, on the hand, jumped, leaving many utility bills unpaid. For 13 per cent of respondents, which would equate to more than 8m people, have energy bill arrears of between one and three months. The same number of people reported being in rent or mortgage arrears as well.

 
And as more and more households rely on credit to get by – the ability to pay for these debts has diminished.

 
Almost a quarter have fallen behind payments on a credit card or a loan, with 15 per cent reporting they were up to three months in arrears on credit card payments.

Foreshadow 

 
Unite Community coordinator Liane Groves said the survey foreshadowed the pain that more and more households will have to bear as the government goes forward with its cuts.

 
“These figures are especially startling considering that changes to tax credits and benefits have not yet gone through,” she said.

“If it’s true that we’re on the road to economic recovery, then why is it that so many are struggling to put food on the table and heat their homes without resorting to borrowing money?

“For those who cannot turn to family or friends for support, borrowing will necessarily mean falling prey to pay day loan sharks and being sucked into the downward spiral of debt,” Groves added.

“Let’s not be fooled – this so-called economic recovery is disguising a ticking time bomb of looming extreme poverty,” she went on to say.

“We can see it in the blossoming of food banks across the land and in the payday loan shops dotting our high streets. The results from this survey are only skimming the surface – once the government’s latest cuts go through, struggling to eat and pay bills will no longer be a headline story – it will be the norm.”