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Cost of living pressures continue to drive new clients to StepChange

30 August, 2022

New StepChange clients are increasingly citing the cost of living as their main reason for debt. In July, 20% of clients who completed full debt advice said the cost of living was their primary reason for contacting StepChange, up from 18% in June.

Meanwhile, for the first time in several months, the proportion of new clients with energy arrears has jumped. New clients in gas arrears rose from 23% in June to 26% in July, while those in electricity arrears was up from 28% in June to 30% in July.

StepChange is warning that these numbers are only likely to grow without further support from Government, as inflation continues to weigh heavy on household finances and the energy price cap rise looms.

New data from the Bank of England’s Money and Credit statistics shows consumer borrowing remains high, with £1.4bn borrowed in July, suggesting a continued reliance on credit to cope with the ongoing pressures of sky-high inflation and energy bills. StepChange research from earlier this year found that two-thirds (65%) of those using credit as a safety net kept up with credit repayments by missing housing or utility bills, using more credit or cutting back to the point of hardship.

Phil Andrew, CEO of StepChange Debt Charity said:

“It’s no surprise to see cost of living pressures continue to take their toll on our clients’ finances. What’s most concerning is the new rise in energy arrears we’re seeing in the middle of summer when energy use is typically low, and the catastrophic effects of October’s new energy price cap are yet to take hold.

“The next few weeks will be crucial. Our next prime minister must hit the ground running with a set of bold measures that catches millions of households before they fall into fuel poverty, problem debt and destitution. We urgently need to see benefits uprated to match the pace of inflation, alongside a financial support package that is in line with the scale of the energy price rise.”

Notes to editors

  1. You can view StepChange’s monthly client data here
  2. You can view the Bank of England’s monthly Money and Credit report here

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