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Cost of living now in top 5 reasons for debt, reports StepChange Debt Charity

1 March, 2022

January saw the usual seasonal increase in people looking for debt advice, according to the latest client insights report from StepChange Debt Charity. The StepChange website was visited by 358,000 users in January, a 34% rise on December 2021.

Between December and January, there was also a 7% increase in visits to the ‘emergency funding’ page (24,000 visits in January), which remains as the most visited debt information page.

The level of demand for full debt advice remains lower than before the pandemic, potentially reflecting extended flexibility and forbearance among creditors and the strong rebound in employment, but cost of living pressures are rising significantly. Cost of living is now in the top five reasons for debt, being cited by nearly 1 in 10 StepChange clients.

Since the January client data reported here, there have been a number of shocks - such as increased energy prices - and more are expected. These will result in more people experiencing the pressure of debt, and StepChange urges anyone in this position to seek help as soon as their situation starts to decline. People often try to cope alone and struggle for months or even years before seeking help.

The Bank of England’s Money and Credit data out today shows a net increase of £0.6 billion in consumer credit lending in January. This was split between £0.1 billion of additional borrowing on credit cards, and £0.5 billion in borrowing in other forms of consumer credit (such as car dealership finance and personal loans). Total outstanding borrowing is £58.4 billion on credit cards and £139.6 billion on other forms of consumer credit.

Richard Lane, Director of external affairs at StepChange Debt Charity, said:

“The months ahead look sobering in terms of the pressures on UK household finances, with the known rises in National Insurance and energy prices exacerbated further now by all the uncertainty in the geopolitical environment.

“At times like this, people may also be experiencing anxiety, which can be a toxic combination when combined with debt. It’s really important that anyone feeling this way knows that help is always available. We will identify the most sustainable, affordable approach to tackling your debt, reducing the worry that comes with being unable to afford to make ends meet.”


Notes to editors

  1. The latest StepChange client data report can be found here
  2. The Bank of England’s Money and Credit report can be found here

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