As UK households begin switching the heating on, 7m people are reliant on credit to pay their bills this winter according to research from responsible lender, Creditspring. 

Despite a slight dip in inflation, Creditspring warns that many people are set to enter winter with no financial buffer and could be forced to turn to credit to survive. Nearly 8m people (15% of the adult population) admit they’ll be forced to borrow to get by in the next six months.  

A quarter (25%) of UK adults - over 13m people - are forced to dip into their savings each month just to make ends, however the ongoing cost of living crisis has depleted this financial cushion for many households. In fact, one in five people (18%) say they’ll need a loan once their savings run out. 

Even more worryingly, the research shows that one in five (21%) of adults – almost 11m people – don’t have any savings to fall back on at all. 

Three in ten (30%) of people say they are terrified for their financial future and a third (33%) feel stuck believing there is nothing they can do to improve their financial situation. In total, almost four in ten (38%) – or 20m people – say their financial future is unpredictable and they’re uncertain about their future position in six months. 

Neil Kadagathur, Co-Founder and CEO of Creditspring, comments: “Although last year was tough, millions of people are in an even worse situation this time after another 12 months of struggling with rising costs and increasing bills. For many, it is a question of not just eat or heat – but how to ensure they can do either. 

“As we approach another winter of high energy costs, many households have nothing left to fall back on and are hugely concerned about how they will survive the next few months. 

“There needs to be more support for vulnerable people – whilst government support packages would be a huge help the lending industry must also be much more transparent to ensure that people are aware of the true cost of borrowing. By providing more responsible credit products without hidden costs that encourage them to take on extortionate debts, lenders can protect vulnerable borrowers struggling to keep their head above water.” 

Personal finance and consumer rights expert, Martyn James, said: “This deeply troubling research lays bare the reality of the cost-of-living crisis for millions of people across the UK who are just trying to get by. People work hard to build up their savings – and they should not have to use them to cover basic necessities like energy bills. 

“I’m especially concerned about the impact of a cold winter and unaffordable bills on the huge numbers of people who don’t have any safety net. I’m already hearing horror stories from people who are terrified of putting the heating on. These people include those who may be more vulnerable, plus countless others who are experiencing very real financial difficulties. 

“This problem is not going away, so we need decisive Government action and long-term planning to help support those most in need. Failing to do so is a false economy as it’s more expensive to help people who can’t pay their basic bills long-term. But the impact on society as a whole is much more devastating.” 

Top tips from Martyn James: What to do if you are worried about your energy bill payments

• Check out the support options online. All energy businesses have these on their websites, usually under ‘financial difficulties’. These might often include Q&A pages, live chat, phone numbers and social media links. You may be able to do some things online, like submit meter readings.

• Don’t get overwhelmed. Energy bills are complicated, so don’t feel any pressure to become a gas or electricity expert overnight. If something doesn’t make sense, ask the business to explain it in plain English terms.

• If you’re struggling financially, tell the firm you are in financial difficulties and they should come up with a tailored plan to suit your needs.  You can find a full list of the support that the regulator Ofgem says you can expect here: https://www.ofgem.gov.uk/getting-help-if-you-cant-afford-your-energy-bills

• Make a mini budget. This will help the energy firm work out the best option for your circumstances. The fabulous debt charity can help you do this here. StepChange can also step in for you if you can’t afford your monthly bills and will deal with your creditors for you.

• If the business isn’t listening, make a complaint. Keep things simple and focused on the problems you’d like the business to address. Ask the business if you can email or send them the written complaint if it’s complicated. Don’t forget to tell the business what you want to sort the problem out.

• If you’re getting threatening letters, tell the business you are making a complaint and ask them to confirm in writing that they will suspend any debt collection activity while the matter is looked into. Make it clear that you will go to the free Energy Ombudsman if you are unhappy.

Creditspring provides a new way to access credit safely. FCA-regulated, it is a credit subscription service that offers affordable, responsible credit to borrowers. Members pay a fixed membership fee every month to allow them to access two no-interest loans per year with clear repayment terms, capped costs and no hidden charges, late fees or confusing interest rates.