Lloyds debt service demand rises by 30%

Lloyds UK has reported a 30% jump in the number of its customers seeking debt advice so far this year.

The bank, which is the UK’s second-largest with 26million customers, also revealed that 80% of current account holders had less than £500 to their name. Perhaps unsurprisingly, 75% expressed some kind of concern about the current cost of living crisis and how it would impact them. 

Speaking with the BBC, Lloyds chief executive Charlie Nunn said: “Customers are concerned, and they should be. We have seen some areas where there’s real points of challenge.

“About 80% of individuals and UK customers and families have less than £500 worth of savings in their current account and their savings account. They might have money elsewhere but what we can see is less than £500.”

Despite recognising that there were serious issues, Nunn also suggested that people were being too negative, which could in turn have worse implications for the economy.

“We are concerned that I think we collectively are talking ourselves into the risk of too negative an outlook,” he said.

“There are pockets of strength in the economy. There are significant parts of the consumers in the UK who have strength and really want to spend and create that demand and we can continue to see opportunities to invest in growth.”

However, the struggle facing many households - especially low-income families - is impossible to ignore. Lloyds found that 20% of their customers had been forced to cut back on costs in order to afford necessities. 

Similar research, this time from Which? paints a similar picture. In a survey, the consumer group found that two-thirds of their low-income customers had been forced to make at least one significant financial adjustment in the last month to cover expenses.

The UK is currently in the throes of a cost of living crisis which is being described by many as the worst generation. With inflation at 9.1%, its highest level since 1981, it’s not hard to see why. 

While there are multiple causes of this, the largest by far is rising energy bills. April saw the price cap - a figure set by Ofgem which limits how much companies can charge customers - increase by 54%. A similar hike is expected in October, which would leave households with average gas and electricity expenses of £3000 per year.

The government has announced a range of support measures in response to this. these come in the form of a one-off £450 payment for all domestic energy customers, with more targeted support for vulnerable and low-income households.