Credit card defaults hit financial crisis levels as lenders warn of further rises through winter

From the Newshound archive · first published 9 October 2026.

Credit card defaults have climbed to their highest level since the financial crisis, according to the Bank of England's quarterly Credit Conditions Survey, as households strain under the combined pressure of rising energy bills, persistent inflation and higher borrowing costs. Lenders across the banking and building society sector anticipate defaults will continue rising through the three months to November, while debt charity StepChange has taken on 20% more clients than it projected for this year. Mortgage and business loan defaults are holding relatively steady by comparison, throwing the deterioration in unsecured household credit into sharp relief.

StepChange's Adam Butler warned that 'further price shocks' from winter energy rises will push more struggling families to seek help.

Lenders say the crunch will worsen as seasonal Christmas spending collides with interest rates trending upward and consumer prices still above the Bank of England's target.

KPMG's global financial services head Karim Haji said the figures suggest households are leaning on credit while finding it harder to manage their existing commitments.