Rising living costs ''are pushing consumers into debt''

By MoneyhighStreet Staff. Published on July 3, 2008 This post currently has no comments.

credit card
Consumers in the UK are being forced to take on more debt to help them manage their rising living costs, a new report has warned.

Website moneysupermarket.com published data that showed that around 1.8 million people have opted to take out a loan in the last 12 months to meet their mortgage or rent payments.

What''s more, 2.3 million households have had to spend more money on their credit cards to keep up with rising prices.

Worryingly, it seems that older people are being particularly affected by rising prices, with 20 per cent of people in their forties reporting they have turned to loans and credit cards to make ends meet.

"It''s a very serious situation when you have people turning to a short-term solution to fund a long-term product," warned Tim Moss, head of loans and debt at moneysupermarket.com.

"Having a roof over your head has to be your top priority but to be funding that with a loan you might default on or with a credit card that will eventually charge you interest of over 15 per cent isn''t the solution in the long term.

Recently, Credit Action reported that "Britain''s interest repayments have soared to £94 billion in the last 12 months".