New research reveals that Brits are currently £132.5bn in debt, with quick financial fixes, such as popular Buy Now Pay Later schemes (BNPL) and high-interest payday loans fuelling everyday borrowing habits.
The Cost-of-living Credit Crunch Report 2023 by VoucherCodes.co.uk, the UK’s most trusted savings site, examines the type of debt Brits hold and their sentiment towards it, revealing that half of Brits are currently in debt (50%), with the average person owing £3,845.
Many people are relying on instant borrowing to fund everyday purchases, with over one in 10 (11%) currently owing money to Buy Now Pay Later platforms, such as Klarna. Despite demand soaring amongst all generations for these services, it’s the younger age groups who are most likely to rack up debt using this method, with 17% of Millennials (aged 27-42) and 13% of Gen Z (aged 18-26) admitting to owing money in this way.
It’s not just newer borrowing models, like BNPL platforms which are aiding Brits’ borrowing habits, many are turning to more traditional means to get a quick financial fix, with two million consumers confessing to owing money to a high-interest or payday loan company (4%).
Unfortunately, it doesn’t stop there, as one million UK shoppers have turned to illegal high-interest money lenders, such as loan sharks to get a quick pay-out, with Gen Z (4%) and students (4%) most likely to turn to these unregulated sources of finance – twice the national average.
Quick financial fixes split by age group
| Age Group | % of age group who currently owe on a BNPL scheme | % of age group who currently owe on a high-interest payday loan | % of age group who currently owe to a loan shark |
| 18-26 | 13% | 5% | 4% |
| 27-42 | 17% | 5% | 2% |
| 43-58 | 10% | 3% | 1% |
| 59-68 | 5% | 1% | 0% |
| 69-77 | 3% | 1% | 0% |
| 78-95 | 3% | 0% | 0% |
| National average | 11% |
4% |
2% |
When looking into how Brits feel about debt, almost half (45%), state being in debt or even the thought of it makes them feel worried or anxious, and that it would keep them up at night. At the other end of the spectrum, quick financial fixes could be leading consumers to feel more comfortable owing money, as over one in 10 (15%) say they are confident they will be able to pay back their debt and 12% stating debt is normal and commonplace.
“It is concerning to see a high proportion of people have turned to high-interest loans and even illegal money lenders to obtain quick financial gain. Although it might seem like this is the only option, there are other ways to seek financial help, such as speaking to organisations like Citizens Advice and MoneyHelper.
“Debt advice is not a one size fits all solution and what is best for you will be dependent on your personal circumstances. Speaking to an impartial debt advisor can help you become debt free sooner as they will suggest ways of dealing with your debt that you may not already know about.”
For more information, visit VoucherCodes.co.uk.
