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Cost of living crisis drives 118% increase in prepaid card use

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Despite Britain announcing that it is officially out of recession, consumers continue to be wary and are increasingly turning to prepaid cards and adjusting their spending habits to manage the ongoing cost of living crisis and to avoid debt.

The survey, conducted by research firm Opinium, of 2,000 UK adults (18+) reveals that 1 in 5 UK consumers (11.4 million) use prepaid cards, a 118% increase since the cost of living crisis began.

34% of users (3.9 million) said they use prepaid to stay in control of their finances, while 26% (3 million) use them to avoid going into debt.

More than half (56%) of prepaid card users are aged 18 to 34.

Additionally, the survey revealed that men are 53% more likely to use prepaid cards compared to women (26% compared to 17% respectively).

Key Findings:

Fear of debt driving Brits to use prepaid cards

  • Over 21% of Brits (11.4 million) now use prepaid, reflecting a 118% increase since the cost of living crisis began.
  • Debt Avoidance: 26% of prepaid users (3 million) use them to avoid going into debt.
  • Financial Control: 34% of prepaid users (3.9 million) aim to stay in control of their finances through prepaid cards.

Men and Londoners Lead UK Surge in Prepaid Usage

  • Demographics: UK men (26%) are 53% more likely to use prepaid than women (17%).
  • Londoners (61%) are 144% more likely to use prepaid than any other UK region (next is 25%).

UK Under 35s and Men use Prepaid to Fight Fraud

  • UK 18 to 34s using prepaid cards (35%) are 75% more likely to use prepaid for financial information protection than 35-54 year olds using them (20%).
  • UK males using prepaid cards (31%) are 55% more likely than female users (20%) to use prepaid cards to protect against fraud.

“The cost of living crisis has changed spending habits, driving Brits to seek alternative ways to ensure they are in control of their spending,” comments Günther Vogelpoel, CEO of Recharge.

“Prepaid payment products are just one of the ways they are doing this. Our research highlights the importance of financial security and control. Recharge is all about putting the consumer in charge and providing them with the options to spend their way whilst continuing to meet their evolving needs.”

 

Source: Payments Cards and Mobile

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