Demand at UK’s biggest pawnbroker at record high amid cost of living crisis

A record number of people are pawning items to borrow money from Britain’s largest pawnbroker amid an escalating cost of living crisis.

H&T Group said “pledge lending” – lending secured against a customer’s valuable items such as watches or jewellery – was at record levels, in a trading update published on Monday.

The pawnbroker’s growth has been prompted by customers’ squeezed finances amid 40-year high inflation, according to Shore Capital, an investment bank. Consumer prices index inflation hit 9.1% in May, the highest level since February 1982, on the back of wide-ranging price rises fuelled by disruption from the coronavirus pandemic and Russia’s invasion of Ukraine.

Borrowing from H&T has exceeded the pre-pandemic high with no relaxation of lending criteria.

“This strong demand, in our view, reflects the impact of the cost of living crisis as well as the withdrawal of competition from the unsecured high-cost credit space, including through the recent closure of two of the leading home-collected credit firms,” wrote Gary Greenwood, a Shore Capital analyst.

He added that the cost of living crisis was likely to continue to support demand for pawnbrokers. Economists expect household finances to be hit further in the autumn, when the UK’s energy price cap will soar to reflect higher prices on global wholesale markets.

H&T’s pawnbroking pledge book was worth £84m at the end of June, up by 74% on the £48m a year earlier and an increase of almost £20m since the end of December when it stood at £67m. The company said there was “growth across the group’s customer base and in all geographies”.

H&T, which was founded in 1897 in London by Messrs Harvey and Thompson, has 256 stores and more than 1,400 workers. It also offers travel money, cheque cashing and gold purchase. Those other services have benefited the company, with demand for gold “buoyant” because of rising prices, and the return of international travel after pandemic restrictions meaning a strong recovery for foreign exchange.

Chris Gillespie, H&T’s chief executive, said: “I am delighted with the progress we have made in the first half of 2022, and the momentum with which we enter the second half of the year.”