As the UK emerges from recession, the lingering cost of living crisis continues to shape the financial behaviors of many citizens. According to Recharge, a leading prepaid payment firm, a significant number of UK adults are increasingly relying on prepaid cards to manage their finances and avoid debt.
A recent survey conducted by research firm Opinium for Recharge reveals that 21% of Brits, equivalent to approximately 11.4 million people, are using prepaid cards—a staggering 118% increase since the onset of the cost of living crisis.
Prepaid Cards as a Financial Management Tool
The survey, which polled 2,000 UK adults, found that 34% of prepaid card users (about 3.9 million people) turn to these cards to maintain better control over their finances. Additionally, 26% (around three million users) use prepaid cards to steer clear of accumulating debt.
Günther Vogelpoel, CEO of Recharge, commented on the findings: “The cost of living crisis has fundamentally altered spending habits, prompting Brits to seek out alternative methods to manage their finances. Prepaid payment products are one such method, offering a means to stay in control. Our research underscores the importance of financial security and control, which Recharge is committed to providing through our consumer-focused products.”
Demographic Insights
The data highlights key demographic trends in prepaid card usage. Notably, 56% of prepaid card users are aged 18 to 34. This younger demographic is 75% more likely to use prepaid cards for financial information protection compared to those aged 35 to 54 (35% versus 20%).
Gender differences also emerged, with men 53% more likely to use prepaid cards than women (26% compared to 17%). Regional disparities were significant as well, with Londoners 144% more likely to use prepaid cards than residents of any other UK region, with 61% of Londoners using them compared to the next highest region at 25%.
Conclusion
Recharge’s findings shed light on the growing reliance on prepaid cards as a financial tool amid economic uncertainty. As the UK continues to navigate the cost of living crisis, prepaid cards offer a viable solution for many seeking to control their spending and avoid debt.