The inflation diaries: High rates of credit card debt mean many low-income Britons are being squeezed by rising food and energy prices
By Elisabeth Jeffries
LONDON, July 18 (Thomson Reuters Foundation) - When a debt charity helped Andy slash his monthly credit card repayments, he felt a huge sense of relief. But as food and energy prices skyrocket in Britain, his household budget is under strain once again.
The charity, StepChange, got Andy's card installments down from 800 pounds ($953) per month to 140 pounds by consolidating his various debts, resolving a long-standing money worry that is shared by many Britons with high personal debt levels.
"The cost-of-living increase is going to affect how long it takes to pay the debt off," said Andy, who works in the construction materials industry and asked for his surname not to be published.
While Andy's new repayment plan takes account of his rising household costs, the smaller installments mean it will take longer to clear the debt.
Over the past 18 months, British inflation has increased from 1.6% to 9.1% – its highest rate for 40 years, making it even harder for people with debts to meet their obligations.
Data from the Bank of England shows a 38% increase in households reporting that debt repayments were a heavy financial burden in 2021.
For Andy and his wife, weekly petrol and food costs have more than doubled to reach about 110 pounds despite the family's efforts to economise.
"We're not fancy people. We're very sensible, we make our own meals. Takeaways are for Christmases and birthdays," he told the Thomson Reuters Foundation.
On top of soaring supermarket receipts, the couple have seen their monthly gas and electricity bill jump from 60 pounds to about 200 pounds after a flat rate tariff ended.
Britain's cost-of-living crisis is largely driven by rising global energy and food costs triggered by the Ukraine war and fallout from the COVID-19 pandemic, and both households and businesses are feeling the pinch.
Richard Stilwell said he felt fortunate to have been able to move his small printing business from a draughty office to modern insulated premises in Shropshire in western England, cushioning him against a 60% rise in energy bills since 2021.
It was a saving Stilwell needed to make as a 50% jump in paper costs during the past 18 months increases his company's overheads.
"We have to be very, very careful about everything we do and work a lot harder at keeping the business in a profitable way," Stilwell said. That has ensured he could keep on his staff.
Not everyone has been so fortunate.
Lenny Poynton, 62, of southeast London, lost his job as a removal man in early 2021, but said he was pessimistic about finding work again.
"I'm getting on a bit," said Poynton, adding that he has taken to fasting regularly to help stretch his meagre welfare benefit income of about 250 pounds per month and ensure he has enough left to buy food for his dog.
Conditions have become tougher with rising bills, he said, so he survives with support from friends and family members. He should see some benefit from government support for low-income households against cost-of-living increases.
But he remains worried about the future.
"It's an uphill struggle to make ends meet," Poynton said.
($1 = 0.8389 pounds)
Explore our interactive map below for more stories about the human impact of the cost of living crisis in our three-part series on The Inflation Diaries
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(Reporting by Elisabeth Jeffries; Editing by Helen Popper and Hugo Greenhalgh. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org)
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