Bank of England show households withdrew a net £4.6bn from banks and building societies in May, the highest level of withdrawals since it started collecting the monthly data in October 1997.
Richard Lane, the director of external affairs at the debt charity StepChange, said: “This is the latest in a long line of warnings that more and more people are struggling to cope with the cost of living.
“Whether it’s a sky-high energy bill, a sudden jump in mortgage payments or the gradual increase of the price of the weekly food shop, cost pressures are everywhere and eroding people’s financial headroom, leaving them more vulnerable to harmful borrowing and problem debt.”
Labour MP Rachel Reeves: “NEW: Households dip into savings at record level as the cost of living crisis grows. And all the Tories have to say is “hold your nerve.” Labour will tackle this Tory economic crisis. We’ll secure our economy and make families better off.”
However, the Bank of England data showed that 50,524 mortgages were approved in May – up from 49,020 in April.
