The UK’s largest pawnbroker has reported a rise in profits as its customers sought to secure small, quick loans against jewellery and watches, in a sign of the continuing strain of the cost of living crisis.

H&T, which has 280 shops in the UK, said pre-tax profits had risen by 12.5% to £9.9m in the first six months of 2024 on the same period a year earlier.

Its lending business rose 14% to £146m year on year, which the company said was aided by “broader macroeconomic conditions” and the wider lack of regulated companies offering small, short-term loans.

The cost of living crisis, which accelerated in 2022 when rampant inflation pushed up the price of consumer essentials, has put pressure on household finances, resulting in Britons increasingly turning to pawnbrokers to make ends meet.

H&T and its competitors are often seen a proxy for the state of struggling consumers’ personal finance. The company said the current market conditions “create a growth opportunity for pawnbroking and, as the market leader, for H&T in particular”.

Consumers taking on an H&T loan pay an annual interest rate of 165.5%, and if the loan is not repaid the pawned item is sold to pay the debt.

The company said loans were typically being paid back more quickly than in the past, at 94 days in the first half of this year, from 97 days a year earlier. The value of lending against watches fell, as certain high-end brands have experienced “price volatility”, it said.

Chris Gillespie, the chief executive of H&T, said: “Our core pawnbroking business continues to attract increasing numbers of new and returning customers, for whom alternative sources of small-sum, regulated lending are much constrained.”

On Tuesday, gold prices hit a record high as increasing hopes of US interest rate cuts from the Federal Reserve prompted investors to buy. H&T said: “Gold purchases are benefiting from current elevated gold prices with volumes broadly flat.”

H&T was founded by Walter Harvey and Charles James Thompson in London in 1897. They built the business into a chain of 19 stores before their deaths, weeks apart, in 1915.