Interest rate rise could push stretched household budgets further into the red, says Citizens Advice
Today the Bank of England has decided to raise the base interest rate to 0.75%, the highest level since March 2009.
In response, Gillian Guy, Chief Executive of Citizens Advice, said:
"Last year 340,000 people came to Citizens Advice for help with their debts. Today's move could be enough to push more households into the red.
"Household budgets are increasingly stretched. Our figures show 25% of UK households with a volatile income resorted to credit to pay for essentials such as food and bills.
"But the £209.4 billion borrowed from commercial lenders only tells half the story, with the extent to which people are behind on their household bills falling under the radar. The government must accurately record this so they can understand the true extent of people's financial difficulties.
"People who are concerned about their finances should contact Citizens Advice for budgeting and debt advice."
Background
In 2017-18, debt problems related to household bill and government debts made up 47% of all the debt problems Citizens Advice helped people with. That compares to 24% which were related to consumer credit debt problems.
Our clients with household bill arrears tend to be in a more precarious financial position than those with consumer credit debts:
37% more likely not to be in full time employment
20% more likely to live in social or housing association housing
17% more likely to be a single parent
Citizens Advice is made up of a network of local Citizens Advice in England and Wales, all of which are independent charities, the Citizens Advice consumer service and the national charity Citizens Advice.
Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers.
Citizens Advice is the statutory consumer advocate for energy and postal markets. We provide supplier performance information to consumers and policy analysis to decision makers.
The Citizens Advice Witness Service provides free and independent support for both prosecution and defence witnesses in every criminal court in England and Wales.
Citizens Advice also offers Pension Wise appointments at 500 locations across England and Wales.
The advice provided by the Citizens Advice service is free, independent, confidential and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
To get advice online or find your local Citizens Advice in England and Wales, visit www.citizensadvice.org.uk
You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers.
Last year we helped over 2.7 million people face to face, by phone, email or web chat. For full service statistics see our monthly publication Advice trends.
Citizens Advice service staff are supported by more than 23,000 trained volunteers, working at over 2,500 service outlets across England and Wales.