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Working households struggling to meet basic cost of living

21 November, 2012

Thousands of working households are struggling to meet the basic cost of living, according to new research from StepChange Debt Charity.

The research, conducted for the charity by the Personal Finance Research Centre at the University of Bristol, has highlighted significant numbers of working households (those where at least one person was employed or self-employed) struggling with priority debts such as council tax, energy bills and rent.

In the first nine months of this year, 17 percent (7,911) of the charity’s clients in working households had council tax arrears, 12 percent (5,613) had energy arrears, and nine percent (4,151) had rent arrears.

For working households with council tax arrears, the average amount owed was £821; for rent arrears the figure stood at £842; and for energy arrears the amount owed was £668.

Working household finances

The report also highlighted the declining state of working households’ finances. StepChange Debt Charity clients from working households suffered a five percent drop in income in the last year. In 2011, the average monthly working household income was £1,594, it now stands at £1,514; even without accounting for inflation this represents a drop of £80.

Working households on lower incomes were hit hardest, experiencing an average income drop of 11 percent.

The numbers represent a broader trend in incomes for the charity’s clients, which have been falling or remained static since 2007.

Commenting on the findings Lord Stevenson, chair of StepChange Debt Charity, said: “Our research shows that potentially no-one is immune from the impacts of the financial crisis.

“The increasing numbers of working households falling behind on priority debts represents a deeply concerning trend. Low wage growth and cuts in tax credits combined with rising prices for essentials like food and fuel are pushing more working households into problem debt.

“Struggling to meet the basic cost of living means that many working households are forced to turn to credit just to get by. Increasingly this includes extremely high cost forms of credit such as payday loans.

“Those who find themselves in this position need to be aware that free and impartial advice is available to them.”

Download the full Working Households’ Experiences of Debt Problems report.

Contact the the StepChange news team on:

Tel: 0207 391 4583

Mobile: 07950 469 101

Email: press@stepchange.org

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