Three in 10 renters in the UK have turned to benefits, research from Creditspring reveals.
The Office of National Statistics (ONS) figures show that average rents increased by 8.9% over the last 12 months, with tenants paying over £100 more per month on average than last year.
The latest data by Creditspring found that 30% of renters admit they will have to increasingly rely on state benefits to get by.
This is compared to just 12% of homeowners who have claimed state benefits and 13% who expect their reliance on this support to grow.
Research also found that 37% of renters say this is the most financially unstable they’ve ever been. This is a higher proportion than among homeowners where a quarter (24%) feel this way.
A third (32%) of renters admit they will have to start a side hustle or a second job to make ends meet, compared to 22% of homeowners.
Meanwhile, 13% of renters will have to move back in with parents as they can’t afford to live independently, this rises sharply to a quarter of younger renters aged 18 to 34.
Creditspring says there is a concern that the financial situation of renters may worsen as it becomes more challenging to afford these necessary costs.
Renters are increasingly reliant on credit to pay bills with a fifth (19%) of renters having to borrow to afford these essentials compared to 11% of homeowners placing them at greater risk of long-term debt.
The lender suggests that borrowing levels among renters is already on the rise as costs continue to increase.
Over a fifth (21%) of renters have taken out a new credit card compared to 14% of homeowners, putting them at increased risk of accumulating debt from these expensive forms of borrowing.
Figures from UK Finance indicate that the UK’s total credit card bill rose by £4.5bn in the last 12 months, hitting £64.78bn, as credit card spending rose 8.9%.
As a result of the impact of rising costs across the board, 17% of renters have had to seek advice from a debt charity – compared to 11% of homeowners.
With increased borrowing, Creditspring says this figure is likely to increase further.
Creditspring chief executive officer Neil Kadagathur comments: “As rental prices have soared in recent years, many renters have raided savings pots and borrowed to make ends meet. After exhausting those options, many renters are now forced to turn to benefits to meet their monthly bills.”
“Forced to put up with ever-growing essential costs, many renters are faced with little option but to borrow each month to keep pace with rising rents – a vicious cycle where debt piles soar but savings pots vanish as they struggle to make ends meet.”
“This is driving many into unsustainable levels of debt and has forced growing numbers to return to family homes as they simply cannot afford to continue to live independently.”
