Borrowing on cards and loans
People in the UK borrowed a net £1.9 billion of consumer credit in September 2026: £0.7 billion on credit cards and £1.2 billion through other credit such as car finance and personal loans. That was down from £2.7 billion in August.
Consumer credit was growing at 9.8% a year, up from 7.3% in September 2025. Credit cards grew fastest, at 13.1%.
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What borrowing costs
The Bank of England raised Bank Rate to 4% on 5 November 2026, from 3.75%. The rates households actually pay are much higher for unsecured borrowing. In September an interest-charging credit card cost 21.71% on average and an overdraft 20.79%, against 9.85% for a new personal loan.
The average rate on newly drawn mortgages rose to 4.63% in September, from 4.22% in May. On all outstanding mortgages it was 4.03%. In its November report the Bank of England projects that average annual mortgage payments will be around £1,500 higher by the end of 2029 than before the conflict in the Middle East.
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Mortgage arrears: still falling
76,080 homeowner mortgages were in arrears of at least 2.5% of the balance at the end of September 2026. That is 0.87% of all homeowner mortgages, 2% fewer than in the previous quarter and 10% fewer than a year earlier: the tenth quarterly fall in a row.
Lenders took 1,840 properties into possession in the quarter, 20% fewer than a year earlier. Possessions of owner-occupied homes were unchanged on the quarter, while buy-to-let possessions rose 10% to 690.
| Measure | Q3 2026 | On quarter | On year |
|---|---|---|---|
| Homeowner mortgages in arrears | 76,080 | −2% | −10% |
| Buy-to-let mortgages in arrears | 8,170 | −3% | −22% |
| All possessions | 1,840 | +3% | −20% |
| Owner-occupied possessions | 1,150 | 0% | −17% |
| Buy-to-let possessions | 690 | +10% | −23% |
| Arrears: first-charge mortgages with arrears of 2.5% or more of the balance. Source: UK Finance, Mortgage arrears and possessions, Q3 2026 (12 November 2026). | |||
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Insolvencies: rising
11,894 people in England and Wales entered insolvency in September 2026, 9% more than a year earlier. Over the past 12 months that is one adult in 357 (28.0 per 10,000), up from one in 403 a year before.
Most were individual voluntary arrangements (IVAs), a formal deal to repay part of what is owed. The 7,385 IVAs in September were the most in any month since November 2022, apart from December 2025, which was inflated by a backlog of cases.
Elsewhere in the UK, Scotland recorded 2,181 individual insolvencies in April to June 2026, 13% more than a year earlier, and Northern Ireland 189 in September 2026.
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What it means for households
Borrowing on cards and loans is growing quickly, and it is expensive. At the average credit card rate of 21.71%, a £1,000 balance that isn't paid down costs roughly £217 a year in interest.
Most mortgage holders are keeping up with payments, and arrears are low. But new mortgages cost more than at the start of the year, and Bank Rate went up in November, so people coming off fixed-rate deals face higher payments.
The rise in insolvencies is mostly IVAs. An IVA, a debt relief order or bankruptcy is a formal step with lasting effects, and free advisers can explain whether any of them is right for someone's situation.
Struggling with payments? Free, confidential advice is available from StepChange, National Debtline, Citizens Advice and MoneyHelper. Our help page explains where to start.
To see how long your own debts would take to clear, try the debt payoff planner. Nothing you enter is stored.
Sources
- Bank of England: Money and Credit, September 2026, published 29 October 2026
- Bank of England: Money and Credit, September 2025 (consumer credit growth a year earlier)
- Bank of England: Money and Credit, May 2026 (new mortgage rate in May)
- Bank of England: Monetary Policy Summary, November 2026, published 5 November 2026
- Bank of England: Monetary Policy Report, November 2026 (projected mortgage payments)
- UK Finance: Mortgage arrears and possessions, Q3 2026, published 12 November 2026
- UK Finance: Modest growth forecast for mortgage lending in 2026, mortgage market forecasts published 15 December 2025 (fixed-rate deals ending in 2026)
- Insolvency Service: Individual insolvency statistics, September 2026, published 20 October 2026