From cars to cost of living: Why a third of Brits have taken out a loan in the last three years
As Water UK* announce that the average annual water bill is set to rise 5.4% in England and Wales from April, new research has found that a third (33%) of Brits have taken out a loan in the last three years – with some revealing they are even using them to help cover rising living costs.**
The research, conducted by Go.Compare Money, asked Brits whether they’d taken out a loan in the last 36 months. Among those who had borrowed money, the most common reason was to buy a car. This was followed by people needing a loan to cover an unexpected bill, fund home improvements, or help with everyday living costs. And with research also showing that rising living costs and household bills are Brits' biggest financial worry for the year ahead, this is perhaps unsurprising.
|
Reasons people are taking out loans |
% of Brits surveyed** |
|
|
1 |
A car |
7% |
|
2 |
An unexpected bill |
6% |
|
3 |
Home improvements |
5% |
|
4 |
To cover day-to-day living costs |
5% |
|
5 |
To help pay off other debt |
4% |
|
6 |
A holiday |
4% |
|
7 |
To consolidate existing debts |
4% |
|
8 |
For educational expenses |
4% |
|
9 |
To cover moving costs |
3% |
|
10 |
To pay for a funeral |
2% |
Among those taking out loans, men were more likely to borrow than women, with 38% compared to 28%. Younger people were also more likely to have used a loan, with half (51%) of 18-24 year olds, and 56% of 25-34-year-olds saying they have entered a loan agreement, compared to just 14% of those aged 55 and over.
Regionally, the areas with the highest reliance on loans are Northern Ireland, where nearly half of people (47%) said they had borrowed money, followed by Greater London (44%) and the North East (35%).
Rhys Jones, Go.Compare Money spokesperson, says sensible loans with manageable repayments can work well for some people, but warns that the trend of using loans to cover rising costs and day-to-day living is worrying.
He said: “It’s concerning to see that so many people are relying on loans to help with everyday living costs. Before taking out a loan, we always advise that you take time to properly understand the terms of your loan - while the headline rate might look like it will help financially, before signing any agreement, it’s important to look into the details. Check the total amount you’ll repay, and consider whether the repayments are manageable for you.
“Everyone’s financial situation is different, and so it’s important to find a loan that works for your circumstances. Depending on what you are financing, there may be several loan options available to you. Whether it’s for a car, a wedding or emergency repairs, if anything is unclear, seek extra help to ensure you choose a loan that truly suits your circumstances, both now and in the future.
“To get a better picture, use our loans calculator to help work out what your borrowing could look like. It gives an estimate of what your repayments will be, based on the amount borrowed, the term of the loan, and the interest rate.
“And if you’re ever struggling to keep up with repayments, speak to your lender as soon as possible, as they may be able to help.”
To find out more about the different kinds of personal loans, visit: https://www.gocompare.com/loans/personal-loans/.
Contact Information
Rubie Barker
Notes to editors
* https://www.bbc.co.uk/news/articles/cn56p0qkky7o
**The research was conducted by Censuswide, among a sample of 2,000 UK Nationally Representative Consumers aged 18+. The data was collected between 19.11.2025 – 21.11.2025. Censuswide abides by and employs members of the Market Research Society and follows the MRS code of conduct and ESOMAR principles. Censuswide is also a member of the British Polling Council.
For further information please contact:
About Go.Compare
Go.Compare is a comparison website that enables people to compare the costs and features of a wide variety of insurance policies, financial products and energy tariffs.
It does not charge people to use its services and does not accept advertising or sponsored listings, so all product comparisons are unbiased. Go.Compare makes its money through fees paid by the providers of products that appear on its various comparison services when a customer buys through the site.
When it launched in 2006, it was the first comparison site to focus on displaying policy details rather than just listing prices, with the aim of helping people to make better-informed decisions when buying their insurance. It is this approach to comparing products that secured the company an invitation to join the British Insurance Brokers’ Association (BIBA) in 2008, and it is still the only comparison site to be a member of this organisation.
Go.Compare has remained dedicated to helping people choose the most appropriate products rather than just the cheapest and works with Defaqto, the independent financial researcher, to integrate additional policy information into a number of its insurance comparison services. This allows people to compare up to an extra 30 features of cover.
Go.Compare is part of Future Plc and is authorised and regulated by the Financial Conduct Authority (FCA).
More information can be found here www.gocompare.com or here https://www.futureplc.com/brands/.