Demand for debt services by Lloyds customers jumps 30%

theguardian.com:

Demand for debt services among Lloyds Bank customers has jumped by 30% in the first six months of the year, as the cost of living crisis takes its toll.

Amid a squeeze on living standards, research from the bank indicates three-quarters of its 26 million UK customers were worrying about rising prices and the impact it is having on their savings.

The chief executive of Lloyds, Charlie Nunn, said that customers were working to get a grip on their finances by consolidating their debts.

Nunn added that eight in 10 of its customers have less than £500 of savings in their current and savings accounts.

Lloyds Banking Group is the country’s largest mortgage lender and is often considered a bellwether for the UK economy.

According to its research, 20% of its customers are already cutting back on their discretionary spending to make sure they can cover the cost of essential items.

“Customers are concerned, and they should be,” Nunn told the BBC. “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 the sharp increase in customers dealing with problem debts, Nunn said that only 1% were unable to pay their usual bills.

Inflation in the UK soared to a 40-year high of 9.1% in May, and is predicted to rise as high as 11% later this year, amid soaring costs of energy, food and raw materials.

The lender reported in the spring that its customers were already beginning to tighten their belts, with more than 1 million cancelling their gym memberships and video streaming contracts.

Lloyds said last month it would give