Nationwide Building Society has issued an urgent warning as debt levels continue to rise, with November figures showing borrowing at £696million – four per cent higher than the same period last year.
The building society’s data reveals customers borrowed more to cover Christmas expenses, with November 2023 debt reaching £696million compared to £672million in 2022.
The financial institution is now calling for customers facing financial difficulties to seek help, as January is expected to bring record-high debt levels.
This surge in borrowing has eroded the positive financial gains made during the pandemic, according to Nationwide’s spending data.
The trend indicates January 2025 debt levels are set to reach their highest point since the society began tracking these figures before the pandemic.
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Nationwide Building Society has issued an urgent warning
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Nationwide’s data shows a significant increase in debt repayments, with customers repaying £796million in January 2024. This represents a 43 per cent rise compared to January 2021, when repayments stood at £556million.
The figure also marks a 29 per cent increase from pre-pandemic levels, when customers repaid £619million in January 2020. Despite the concerning trend in debt growth, the Office for National Statistics offers some reassurance.
Their figures indicate that unsecured household debt relative to household income remains at manageable levels. These debt levels are currently well below their historical peak, suggesting that while borrowing is increasing, most households are still able to manage their financial obligations.
January’s financial pressures are set to create a perfect storm for many households, with multiple challenges converging at once. The month coincides with an increase in the energy price cap, adding strain to household budgets.
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The Self-Assessment Tax Returns deadline also falls in January, creating additional financial pressure for many. These challenges come at a particularly difficult time, as the cost of living remains high for UK households.
Nationwide has established a dedicated cost-of-living helpline (0800 030 40 66) to support customers through these difficulties. The building society offers comprehensive support options, including in-branch assistance and telephone consultations.
Their services range from financial health checks to forbearance options for those experiencing financial hardship. Customers are encouraged to contact their bank or building society for help in getting their finances back on track.
Mark Nalder, Nationwide’s Payments Strategy director, highlighted the financial challenges many face in the New Year.
“December is always the peak month for spending, and many will turn to credit to fund their Christmas festivities,” he said.
“Unfortunately, this means many start the New Year with more to pay back. And with rising energy bills and annual tax returns, January could be a long month for many.”
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He noted that this financial pressure often leads to increased holiday bookings, as “people have something to look forward to.”
Nalder emphasised the importance of seeking help: “For customers who are struggling financially, whatever time of year it is, they should get in touch with our cost of living helpline for support in getting back on track.”
Despite the financial pressures, Nationwide’s data shows people are still spending on luxuries, particularly holidays.
