Increasing private school fees, combined with rising food and fuel prices, will see many parents take out credit in months to come.
Increasing school fees will see more hard-up parents take out a loan to cover costs, Sainsbury's said today.
According to the personal loans provider, the average annual private school fee went up by 6.2 per cent last year to hit £11,250. It is thought that this additional expense will push people into taking out extra credit. An additional factor is the rising food and fuel prices which have been seen recently: the CPI inflation rate - used by the government and the Bank of England to track price rises - having jumped by half a percentage point to three per cent on its latest reading.
Over the past year, Sainsbury's says that 18,000 loans worth around £165 million were taken out for this reason. This means that the average borrower took out around £9,000 each.
Commenting on the figures, head of loans at Sainsbury's Steven Baillie said: "A combination of a rise in the cost of living, more children going to private school and the cost of private education rising could lead to more parents taking out loans to help fund their children's education. Parents need to make sure they are shopping around for the best loan rate available and not simply turning to their current account provider."
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