Energy, housing and household arrears climb again in 2025, StepChange warns
16 March 2026
StepChange Debt Charity’s 2025 Statistics Yearbook, published today to mark the start of Debt Awareness Week, highlights a worrying rise in financial vulnerability among people seeking debt advice. The data shows that household debts are increasing at a pace that continues to exceed the annual rate of inflation.
StepChange warns that high levels of arrears across essential bills have become the ‘new normal’ for many households. Those on the lowest incomes are being hit hardest, often forced to juggle everyday living costs while trying to repay historic debts.
Key highlights from the report reveal that in 2025:
- Average household arrears are up 11% year on year, from £3,911 to £4,345
- Average unsecured debt has increased by 8%, from £15,672 in 2024 to £16,874 in 2025
- Average energy arrears have grown by 9%, from £2,340 to £2,560
- Despite slower growth in mortgage and rental prices across the UK in 2025, StepChange clients are experiencing steep jumps in housing-related arrears. Average rent arrears have climbed by 15% to £2,372, while average mortgage arrears have surged by 22%, from £10,239 in 2024 to £12,534 in 2025.
The report identifies some modest signs of improvement, including a slight fall in the proportion of clients in a negative budget, which is when a client’s expenditure outpaces their income. In 2025 this was 28% of all clients, a significant minority, but slightly lower than 2024 (30%) and 2023 (32%).
However, among clients still in negative budgets, the proportion who are unemployed and actively seeking work has increased by five percentage points over two years, now standing at 24%. This shift points to the growing impact of job‑market uncertainty on household finances.
The charity is calling for stronger government action to prevent people from falling into debt simply to meet essential costs, and to ensure adequate support is available for those already struggling.
Vikki Brownridge, CEO at StepChange Debt Charity, said:
“The cost of everyday essentials remains prohibitively high for many households, and our client data has reflected this pressure for several years. Rising household arrears show little sign of slowing down. As Debt Awareness Week begins, it’s a vital moment for government to act on the affordability of essential bills, especially for people on the lowest incomes.
“Introducing national social tariffs in energy and water is a vital step to bring costs back down to a level that is affordable for those with low incomes or high needs, for example due to a health condition. It’s also crucial the Government builds on its work in the Child Poverty Strategy and elsewhere to increase household incomes.
“Recent initiatives like the Financial Inclusion Strategy and measures to expand access to affordable credit and support for saving are positive steps to support struggling households to build financial resilience, and we look forward to seeing tangible progress emerge from this work.”
Notes to Editors
- The 2025 Statistics Yearbook can be found here.