London Daily

Focus on the big picture.
Thursday, Sep 10, 2026

Debt avoided by cutbacks on dining out and clothes, banks' data shows

Debt avoided by cutbacks on dining out and clothes, banks' data shows

Consumers have developed money-saving shopping habits to help stave off problem debt as the cost of living has soared, according to banks.

People have cut back on non-essential spending on things like clothes and dining out, data from UK debit and credit card transactions suggested.

But those on low-incomes, already under financial stress, often face problems such as falling behind on energy bills.

Advisers say some are too frightened to open letters fearing demands inside.

Dame Clare Moriarty, chief executive of Citizens Advice, said that, for these people, the "cost of living crisis is turning into a debt crisis".


Record food bank referrals


Two broad camps have emerged among consumers as prices and bills have soared over the winter, although everyone's financial situation is different.

Banks say that millions of people had built up a savings buffer during Covid lockdowns and have kept their jobs, which had helped to accommodate the rising cost of living. They have also cut back on various elements of spending to help their situation.

The second group do not have that luxury and, although they may be working, could have already been in financial difficulty.

Citizens Advice said it saw more of its clients in January requiring food bank referrals and charitable support than ever before.


Discount buys


Among those with some savings and a higher income, changing habits have helped to keep debt down. Banks say arrears on loans and credit cards have remained relatively stable.

"Most of our customer base is demonstrating a healthy level of financial resilience," said Matt Hammerstein, chief executive of Barclays UK.

"Those fortunate enough to have built up a buffer have been able to accommodate rising living costs more comfortably, with many making reasonable lifestyle adjustments to stay ahead."

Those adjustments, according to Barclays, include:

*  The majority of people cutting down on discretionary card spending on things like clothing

*  People searching for discounts on entertainment

*  The rising popularity of "dupes" which are lower-priced alternatives to popular products

Barclays said its data covered around half of UK debit and credit card transactions, but the comparisons with a year ago were affected by a post-Omicron boost in some sectors 12 months ago.

Its conclusions were backed up in a report by banking trade body UK Finance reviewing the final three months of last year.

"Overall spending on credit and debit cards held up. But changes in patterns of spending within this indicate a shift away from luxuries towards essentials and cheaper options, as cost-of-living pressures bear down," it said.

Essential spending has risen faster, but the data suggests a significant proportion of shoppers are seeking out budget and value range groceries and shopping in a variety of supermarkets to make the most of deals.

Anne (left) and Retee have been helping people deal with financial worries


The rising cost of food and energy is having a significant impact on the finances of a swathe of lower-income families.

Some of those will be using a prepayment meter for their gas and electricity. Citizens Advice said the number of its clients who said they could not afford to top up their prepayment meter in January was the highest month on record.

The number of clients struggling with debts with their energy provider has risen, and the typical level of that debt has been increasing sharply.


Courage needed


Those on the front line of advice said issues with utility bills had become more common.

Debt Free Advice, a partnership of 16 charities, has been touring London over the winter with advisers giving impromptu guidance from the back of a bus funded by the Mayor of London.

On one of these trips, Retee - one of the money coaches - told the BBC that many people needed reassurance that they were not alone in difficult circumstances.

"I always see our clients as very courageous people. It takes a lot of courage to say you need help. Some are shy or feel ashamed," she said.

"Some people are in a dire situation. They have sleepless nights. They can't really cope and do not know how to get out of the situation they are in.

"They are choosing whether to heat their home or to have a meal with their children."

She said some people came in with unopened letters owing to the "fear of what is inside those letters".

Retee, who switched from work in hospitality to money advice during lockdown, had been conducting assessments then sending people on to specialist advice.


Tackling It Together: How to deal with looming debt

*  Talk to someone. You are not alone and there is help available. A trained debt adviser can talk you through the options. Here are some organisations to get in touch with.

*  Take control. Citizens Advice suggest you work out how much you owe, who to, which debts are the most urgent and how much you need to pay each month.

*  Ask for a payment plan. Energy suppliers, for example, must give you a chance to clear your debt before taking any action to recover the money

*  Check you're getting the right money. Use the independent MoneyHelper website or benefits calculators run by Policy in Practice and charities Entitledto and Turn2us

*  Ask for breathing space. If you're receiving debt advice in England and Wales you can apply for a break to shield you from further interest and charges for up to 60 days.

Matt Dronfield, managing director of Debt Free Advice, said advisers spoke 33 languages between them and often helped people negotiate with creditors as well as apply for grants and benefits.

About 60% of those who were helped were women, he said, and there was a particular focus on those from an minority ethnic background.

Traditionally, a stigma surrounded debt, he said, with some people more likely to talk to their pet than their partner about money issues.

"Talking to someone is the first step. We show there is someone on their side, perhaps for the first time, so they can start to see a future," he said.

Newsletter

Related Articles

0:00
0:00
Close
Buckingham Palace Says Prince Harry and Meghan Will Not Resume Official Royal Duties
UK Treasury Faces Calls to Scrap £100,000 Childcare Support Threshold
Trades Union Congress Urges Labour Government to Rewrite Migration Policy
Riot Police Deployed After Anti-Migrant Protests Turn Violent in Portsmouth
UK Considers Replacing Some Disability Cash Payments With Direct Services
JPMorgan’s Jamie Dimon Warns UK Chancellor Against Higher Banking Taxes
UK Announces New Sanctions Targeting Israeli Settlements in West Bank
Metropolitan Police Investigate Alleged Illegal Donations to Reform UK
UK Charges Wiltshire Man With Assisting Russian Intelligence
UK Orders Urgent Review After Air Traffic Failure Cancels More Than 2,000 Flights
Merz Rebukes AfD Expansion in Saxony-Anhalt
King Charles Confirms Prince Harry and Meghan Will Remain Private Citizens
Labour Selects Former Child Refugee for By-Election in Keir Starmer’s Former Seat
Foreign Private Equity Accelerates Takeovers of London-Listed Industrial Companies
NHS Maternity Care Faces Scrutiny Over Support for Mothers After Caesarean Births
BBC Warns Staff Strikes Are Likely Amid Job Cuts and Programme Cancellations
English Housing Affordability Improves to Best Level in More Than a Decade
UK Health Commission Proposes Framework for Wider AI Adoption Across NHS
Labour Faces Pressure for Wealth Tax Ahead of Autumn Budget
Metropolitan Police Open Criminal Investigation Into Alleged Foreign Donations to Reform UK
UK Police Deploy Riot Officers After Anti-Immigration Unrest in Portsmouth and Dover
UK Defends Sanctions on Israeli Settlements Despite Diplomatic Retaliation
UK Air Traffic Control Failure Cancels More Than 1,000 Flights and Disrupts 65,000 Passengers
Compass Urges £10 Million Wealth Tax and Public Ownership Ahead of UK Autumn Budget
UK Government’s Devolution Plans Face House of Lords Scrutiny
Maldives Seeks New Chagos Sovereignty Talks With UK Prime Minister Andy Burnham
UK Airports Face Continuing Disruption After National Air Traffic Control Failure
UK Bans Imports From Israeli Settlements and Expands Sanctions on Iran
British Chambers of Commerce Forecasts UK Growth of 1% as Investment Remains Weak
UK Suspends Local Government Reorganisation Decisions and Cancels Planned Shadow Authority Polls
UK Parliament Opens Inquiry Into Gaps in Climate Change Preparedness
Andy Burnham and Xi Jinping Hold Talks on Trade, Security and British Consular Cases
UK Joins France, Canada and Other Nations in Measures Against Israeli West Bank Settlements
UK Announces New Sanctions Targeting Iranian Nuclear and Military Networks
British Chambers of Commerce Calls for Business Rate Reform and Productivity Support
UK Farmers Warn Dry Summer Could Reduce Crop Yields and Push Up Food Prices
UK Rail Networks Hit by Widespread Delays After Major Signalling Failures
Matt Clifford Resigns as ARIA Chair After Conflict-of-Interest Scrutiny
UK and France Say Joint Border Operations Have Prevented More Than 48,000 Irregular Channel Crossings
UK Core Inflation Remains Above Expectations as Utility and Commodity Costs Stay Elevated
Jaguar Land Rover Considers Up to 4,000 UK Job Cuts Amid Automotive Industry Pressure
UK Government Pauses Local Authority Reorganisation for Legal Review
UK Public Borrowing Reaches £1.8 Billion in July, Adding Pressure Before Autumn Budget
Chancellor John Healey Puts Regional Devolution and Fiscal Discipline at Heart of UK Growth Plan
Counter-Terrorism Police Lead Salford Investigation After Two Teenagers Charged
UK Rejects Financial Reparations for Transatlantic Slavery
UK and Egypt Step Up Diplomacy Over Escalating West Bank Tensions
UK Pauses Council Reorganisation Across Four English Counties
Jaguar Land Rover Plans 4,000 Job Cuts in Major UK Restructuring
UK Unveils Planning and Regulatory Overhaul to Speed Infrastructure and Economic Growth
×