Nationwide Building Society issues cost of living warning as Britons ‘turn to credit’ to pay debt
Nationwide has issued a cost of living warning
GETTY/NATIONWIDE
Nationwide Building Society has issued a cost of living warning after a sharp rise of debt repayments were recorded in April.
The cost of living crisis has seen interest rates skyrocket thanks to the Bank of England’s decision to raise the base rate which has had a knock-on effect on debt.
Based on Nationwide’s Spending Report, customers repaid unsecured debts of £735million in April.
This is a staggering 25 per cent year-on-year increase with the number of transactions to debt repayment jumped by 14 per cent.
In the wake of the cost of living crisis, Britons have resorted to using credit to deal with expenses.
According to the building society, those with a credit card are repaying £391 per month on average.
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The building society is highlighting how much people are paying in debt costs
GETTY/NATIONWIDEOn average, repayments to car finance are coming to £267 and personal loans to £195, respectively.
Despite this, thanks to inflation easing, more Britons are in a better position to pull themselves out of any debt.
Mark Nalder, Nationwide’s Payments Strategy director, outlined the money issues many households are falling into amid the rise in the cost of living.
Nadler explained: “Many households have turned to credit as a way of dealing with rising prices.
“While some are using it to spread the cost of luxury items, such as holidays, others are relying on credit to help pay essential bills.
“However, a 25 per cent rise in credit repayments should be looked at in the round.
“As much as some people will be relying more on their credit cards and loans at this time, a notable fall in essential costs such as energy bills and supermarket spend means others will be using the opportunity to repay more debt while they can.
“We would encourage anyone struggling with debt or worried about their finances to get in touch as we offer a range of tailored support for those facing financial difficulties.”
LATEST DEVELOPMENTS:
Debt has becoming a major issue for households amid the cost of living crisis GETTYTo tackle concerns about the cost of living, Nationwide has launched its own helpline to assist members.
Customers of the building society can call 0800 030 40 66 to arrange support with trained experts.
Support can either be provided in-branch, over the telephone or by video from 8am to 8pm Monday to Saturday.
Examples of the support provided include conducting financial health checks to forbearance options for those facing financial difficulties.