More than eight million UK adults are “financially fragile” and at risk of being over-stretched due to record levels of unsecured debt and rising interest rates amid the cost-of-living crisis, according to a report. Data by accountancy giant PwC and credit app TotallyMoney found that 8.9 million adults are showing signs that their finances are teetering on the brink – meaning that they may need to use their overdraft to cover everyday spending and essentials, such as the food shop.
They may also struggle to keep up with repayments on their borrowing in 2023. The study estimates that unsecured debt, such as personal loans, now stands at more than £400 billion, which equates to a record high of £16,200 for each UK household.
This, with rising interest rates, is leaving household finances worryingly vulnerable, according to the research. PwC also estimates that more than 20 million adults are being “under-served” by UK banks, effectively meaning they are locked out of mainstream banking services, for example because they have a thin credit file, minor adverse credit history or sub-prime credit card.
