HOUSEHOLDS borrowing consumer credit rose to its highest level in five years in November, with more people taking on debt to get through the festive season during the cost-of-living crisis. 

Figures released by the Bank of England today found that the annual growth rate for consumer credit was 8.6 per cent, the highest rate since September 2018.

Consumer credit encompasses borrowing using methods such as credit cards, personal loans and car finance.

Richard Lane, chief client officer at debt charity StepChange, said that January was the busiest time for clients needing debt advice.

He said: “We know that Christmas can put a strain on people’s budgets and for some can create a spiral of unmanageable debt going into the new year. 

“With more people relying on credit to make ends meet following almost two years of the cost-of-living crisis, it’s likely that any money borrowed for Christmas will be particularly difficult to repay in the coming months.” 

A StepChange poll found that one in five people expect it will take them more than a year to repay money borrowed to cover festive costs. 

Money Advice Trust acting chief executive David Cheadle said: “Millions of people are starting the new year feeling unable to cope because of money worries, and with borrowing levels rising, this is a further sign of the financial burden many households are under.”

A report by the Money and Mental Health Policy Institute found that 5.2 million people have been behind on consumer credit payments in the three months ending 2023 — an increase of about 1.5 million people compared to the year before.