Half of us are just one bad month away from financial ruin.

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Lots of stats are used to describe financial exclusion, but that one, calculated by Fair4All Finance, sticks with me for its power to explain the way Britain feels like it does.

Sure, there are numbers for how many of us do without bank accounts or have scant credit files, but nothing comes close to realising every second person you meet is a single missed paycheck or an unexpected bill away from serious debt.

The rising cost of housing, energy and groceries has pushed record numbers of us into relying on credit to afford the basics.

We’re not borrowing to get ahead any more. We’re borrowing just to stand still.

A broken boiler. School uniforms. A car repair so you can still get to work. These are not luxuries. They are the ordinary costs of an ordinary life, now increasingly financed on terms that leave people more exposed with every wobble.

Often, this credit doesn’t feel like credit.

Klarna, Monzo Flex and other buy-now-pay-later products work because they craftily evade the stigma younger generations associate with credit cards, which many associate with driving our parents’ generation into cycles of debt.

Some better alternatives do exist. Credit unions have been around in the UK since the 60s. They are member-owned, and nearly all offer loans for exactly these kinds of unexpected essential expenses. Some offer current accounts, savings and even mortgages.

My local credit union, London Mutual, advertises an APR of 13% on one loan product of £100-5000. That’s hardly a giveaway rate, but it is also not usurious, and it is a world away from the frightening interest charged by many credit cards, payday lenders and loan sharks.

More importantly, credit unions tend to work with you to figure out what you actually need, rather than pushing you toward a larger loan that makes them more money.

But despite the advantages, membership has stayed mostly flat, even through the cost of living crisis.

People still do not really know what credit unions are. Their community feel can be read as amateur. Their loan application forms can feel old-fashioned.

There are some signs of change. £30m of new government funding is intended to double the size of the credit union sector over the next decade, and the Financial Conduct Authority’s new Consumer Duty rules are slowly pushing all firms toward better behaviour.

Long-term money worries change the way you think; pushing you towards bigger bets and riskier choices.

Just a few years ago, London was a hotbed of coding bootcamps, all promising to turn you into a high-earning software engineer in a matter of months. Now they’re all gone, and the people who took that path are staring down the barrel of AI layoffs and an unforgiving job market.

It is not a coincidence that Reddit is now full of young “AI entrepreneurs” with portfolios of dozens of vibe-coded apps, churning out quantity over quality in the hope something will eventually hit.

That is what debt, rising costs and financial exclusion do. They do not just drain your bank balance. They make the future feel smaller, shakier and harder to reach.

We have our work cut out to fix it.

Jaye Hackett is the Chief Technology Officer of Vouchsafe, a tech-for-good company that helps banks, lenders and other firms safely offer their products to more people.

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