Interest-free loans to be rolled out in UK to help with food bills

The initiative will be available to customers nationwide from August 16

The loan scheme is on offer for Iceland customers to spread the cost of grocery bills (Reuters)

Interest-free loans for food shopping are being launched to help people through the cost of living crisis.

Iceland Foods and charity-owned lender Fair For You are offering their customers small loans of between £25 to £100 to help assist with grocery bills.

Shoppers have said the scheme has provided them “piece of mind” during this period of rising prices, and the initiative will launch nationwide from 16 August.

The micro-loans are made available on a pre-loaded card, with repayments set at £10 per week to help customers spread the cost of food shopping.

Customers are able to choose which day of the week they make their repayments and can also overpay if convenient for them.

A pilot scheme of the Food Club initiative found that of 5,000 customers, 92 per cent of shoppers who previously used food banks were able to reduce or stop their visits thanks to the loans.

A further 71 per cent of customers also said they were less likely to fall behind on rent, council tax or other bills and were better able to pay for food and other essentials.

There was also an 80 per cent reduction in the number of customers using loan sharks and 57 per cent of customers felt less “stressed, anxious or depressed” about their finances.

Kelly, a mother of four from Cardiff in Wales, who works full time has used the scheme for over a year as part of its regional pilot and said it has reduced stress during the cost of living crisis.

On her current financial situation, she said: “I do have an alright monthly income, but it’s not much after the rent and the car comes out.

“I don’t use much gas, but my electric bill is huge, especially with the kids now home during the summer, it’s pretty difficult,” she added.

“The Food Club has been really good, you’ve got that option of filling up for the holidays, it’s good peace of mind knowing that it’s there.

“It’s nice to be able to have a family day out in the holidays,” Kelly continued. “We’re going to Bristol Zoo soon, and by getting this card you can free up some money to make sure you can do things like that.

“And it was really, really helpful at Christmas so I could get a few extra treats.”

Richard Walker, the managing director of Iceland Foods, said: “More than ever, people are struggling to purchase much needed everyday items during this relentless cost of living crisis, and fresh thinking is required by business and government to find workable solutions.

“To those striving to worry less about how they will afford essential goods, this ethical credit scheme delivers real help when most needed and I believe it will make a valuable contribution to breaking the cycle of food poverty in this country.”

Simon Dukes, CEO of Fair for You, said: “Nobody should have to go hungry in order to feed their kids, or be forced into making impossible decisions between putting food on the table or having hot water.

“Now that it has launched nationally, it gives plenty more families the opportunity to get the groceries they want, improve their diet and enjoy family meals together, while also getting a better handle on their finances.”

Anyone can apply for the scheme, and, if successful, up to £100 of credit can be used in store and online using a preloaded card, allowing customers to spreading the costs of grocery bills.