Shocking figures are released as winter costs are hiked up to £120

A total of around 2.5 million people will borrow money this Christmas just to have heating in their homes. These shock statistics were published with energy users being hit with the huge winter fuel hikes of around £120. Findings carried out by Circle Housing, a property group, suggest that there will be approximately 7 million people forced to take out a loan over Christmas just to cover any extra costs.

While 4 million say that the loan will help them pay for food and drink over the festive period, more than a 1/3 stated that they will simply use the cash to cover extra costs this Christmas. Worryingly, there will be 1 in 20 borrowers – 350,000 that will use a payday loan company and almost 150,000 who will use a loan shark or an unofficial lender.

The managing director, Faisel Rahman of Fair Finance, a social enterprise which fights financial exclusion, states, “These figures reinforce what we are seeing on the ground as more people are using high cost credit, not for luxuries but for household essentials. While vulnerable tenants are most at risk, this report highlights how the rising costs impact all of us.”

One in six said that they associate Christmas with ‘worry’, ‘anxiety’ or ‘dread’, rather than just looking forward to enjoying the festive period. A financial inclusion officer for Circle Housing, Matt Gaskin stated, “Christmas is always a time of year that household budgets can get stretched and people start to feel the pinch. However, with the recent rises in energy bills we are more worried than ever before that people will turn to payday lenders or loan sharks, particularly some of the most vulnerable sections of society.”

The government are urging people to enquire if they are eligible for help with energy costs, with a report from the British Energy Aid showing that 3.6 million British households can receive heating assistance from their energy supplier this winter.