More than 16 million UK adults have now experienced adverse credit, according to new findings from specialist lender, Pepper Money.

This includes missed payments, credit card arrears, county court judgments (CCJs) and debt arrangements.

Pepper Money’s latest findings, part of its Specialist Lending Study which surveyed 4,000 UK adults, indicated that rising living costs and financial pressures are driving a sharp increase in credit struggles across the UK. The lender found that 30% of UK adults, a figure equivalent to 16.6 million people, have experienced adverse credit – the highest figure since the study began nine years ago.

Adverse credit is also now increasingly common among higher earners, with around half (49%) of those earning over £100,000 reporting adverse credit at some point in their lives, compared to 35% of adults on under £50,000. In the last year alone, 24% of six-figure earners missed a payment, compared to 9% of lower-income earners.

In terms of age, the report also suggested that younger generations are disproportionately affected. One in five (21%) of those aged between 18 and 24 had missed a payment in the last 12 months, compared to just 3% of those aged over 55.

“Adverse credit can impact us all, with higher earners reporting higher instances of experiencing adverse, it is increasingly a feature of modern financial life,” sales director at Pepper Money, Paul Adams, said.

“These figures show just how close many households are to credit difficulty. Rising costs, irregular earnings and shifting borrowing habits are pushing millions to miss payments, which can lead to defaults and CCJs, including customers who have never struggled financially before.”

Pepper Money’s data also indicated that credit difficulties are accelerating. More than half of those affected, a figure equating to around 9.3 million adults, have experienced adverse credit within the last three years, underlining how quickly financial pressure is building.

The lender’s research estimated that 5.6 million people had missed at least one bill or repayment in the past year, with 67% going on to miss additional payments, a figure up sharply from 46% the year before.

“As adverse credit becomes more common, customers need more choice, not less,” Adams added. “Together, brokers and specialist lenders can provide that choice and help people rebuild financial confidence, repair their credit, and continue their next step in homeownership.”

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