Almost a fifth of UK households owe money after failing to repay a loan or loan, as consumers turn to debt to finance everyday expenses, new research has found.

Families in serious financial difficulty are increasingly taking on debt to pay for essentials, according to a survey by the Abrdn Financial Fairness Trust and the University of Bristol.

This comes as the cost of living continues to rise and food prices last month were still more than a tenth higher than the same period last year, according to official data.

The survey found that 16% of households owe money because they have missed at least one payment on a credit obligation, which can include a credit card, personal loan, car finance and buy now, pay later.

This is higher than the 11% who said so in a survey conducted in May this year.

Almost two-thirds of all UK households have consumer debt, the survey of around 5,600 adults found.

But middle-income households, which comprise the middle 20% of income of working-age households, were more likely to owe at least £5,000 on their various forms of credit than those in the lowest 20% of income.

What is particularly worrying is that many people in serious financial difficulty continue to take on debt just to pay for essentials

This suggests that the total amount of loans owed is not always related to the level of financial difficulty households face – people often use credit cards for benefits such as building a credit score and taking advantage of cashback and rewards.

Meanwhile, the survey found that around 15% of households in Britain borrowed money last month to cover everyday expenses such as food and bills, up from 13% who said so in May.

The number of those experiencing financial difficulties rises to 35%.

Karen Barker, head of policy and research at Abrdn Financial Fairness Trust, said: “It is particularly worrying that many in serious financial difficulty continue to take on debt just to pay for essentials.”

“This group is also more likely to borrow from friends and family, meaning their loved ones may have to forgo keeping themselves warm and fed.”

She added that energy bills will rise from January, increasing the risk that people in serious financial difficulty will be “forced to go further into debt to stay afloat”.

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