London Daily

Focus on the big picture.
Wednesday, Sep 23, 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
Piddington Residents Back Symbolic Independence Vote Over Asylum Accommodation Plan
Reform UK Names Helen Jenner as New Leader in Wales
England Expands Devolution of Transport, Skills and Economic Development Powers
Liberal Democrats Call for Temporary Fuel Duty Cut to Ease Cost-of-Living Pressure
UK Farmers Warn Drought Has Caused Crop Failures and Reduced Harvests
UK Fixed Mortgage Rates Approach 6% as Lenders Raise Borrowing Costs
YouGov Poll Puts Labour at 23% With Conservatives and Reform UK on 21%
Badenoch Presses Burnham to Increase Defence Spending and Cut Welfare Costs
UK Military Figures Warn of Growing Threats to Undersea Infrastructure and National Readiness
BP Moves Ahead With Sale of UK North Sea Oil and Gas Business
UK and ASEAN Endorse New Framework for Trade and Economic Cooperation
UK Consumer Confidence Falls to Three-Year Low as Borrowing Costs and Job Concerns Rise
UK Inflation Rises to 3.1% as Motor Fuel Costs Push Prices Higher
Bank of England Sets Multi-Year Plan to Wind Down Quantitative Easing Holdings
UK Borrowing Rises to £18.3 Billion in August Ahead of October Budget
Michelin Guide Faces Industry Questions Over Restaurant Inspection Coverage
English Woodlands Face Renewed Weather Stress From Dry Conditions and Strong Winds
Research Finds Extensive Alcohol, Gambling and Unhealthy Food Branding During 2026 World Cup
Five Charged After Newborn Baby Dies From Stab Wounds in Sheffield
BT Could Reap £2 Billion From Recycling Copper as Full-Fibre Network Expands
FCA Urges Young Adults to Trace £1.5 Billion in Unclaimed Child Trust Funds
Reform UK Names Helen Jenner as New Leader in Wales After Dan Thomas Steps Down
Resolution Foundation Calls for Broad-Based Tax Rises to Fund Higher UK Defence Spending
Ed Davey Calls for Global Treaty to Halt Development of Super-Intelligent AI
Scotland Consults on Legal Price Caps for Essential Foods
NHS Productivity Reforms Could Prevent More Than 20,000 Early Deaths a Year, Report Says
United Kingdom and ASEAN Deepen Trade and Investment Cooperation
United Kingdom Deploys RAF Refuelling Support to Saudi Arabia After Houthi Attacks
UK Fiscal Headroom Shrinks as Higher Borrowing Costs Complicate Autumn Budget
UK Public Borrowing Jumps to £18.3 Billion in August, Raising Pressure Before Budget
Andy Burnham Reaffirms UK Net-Zero Target With £30 Million Community Energy Fund
Scottish Labour Leader Backs Rosebank and Jackdaw North Sea Projects
UK Consumer Confidence Falls to Three-Year Low
UK Diesel Prices Approach £2 a Litre as Global Supply Shortages Intensify
Chiltern Railways Returns to Public Ownership as UK Rail Nationalisation Advances
British Museum Faces Questions Over Peter Thiel’s Private Bayeux Tapestry Viewing
Earl Spencer Memoir Excerpts Renew Public Debate Over Diana’s Death
Liberal Democrats Gather in Brighton for Autumn Conference
Mothercare Shares Plunge as Middle East Store Closures Threaten Long-Term Solvency
Kent Police Treat Folkestone Hotel Fire as Suspicious
Caribbean Governments Advance Reparations Campaign Seeking Engagement With Britain
Scottish Labour Leader Backs Rosebank and Jackdaw North Sea Projects
FCA Urges Young Adults to Trace £1.5 Billion in Unclaimed Child Trust Funds
UK Competition Regulator Opens Inquiry Into McCormick-Unilever Foods Deal
Public Inquiry Into Tees, Esk and Wear Valleys Mental Health Failings Set to Begin
Nigel Farage Looks to US Immigration Enforcement Model for UK Border Policy
Chiltern Railways Moves Into Public Ownership
Security Review Raises Concerns Over Sensitive UK Police Data Stored on Microsoft Cloud
Burnham Government Warns of Difficult Autumn Budget as Fiscal Headroom Narrows
Bank of England Holds Rates at 3.75% as Inflation Rises to 3.1%
×