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StepChange reveals September client insights, comments on latest consumer credit data from Bank of England

29 October, 2021

StepChange Debt Charity today reports that of the 13,000 new clients who took advice from the charity in September, a rising proportion were claiming Universal Credit, experiencing arrears on their energy bills, or in a “negative budget” situation [pages 8 and 9 of report].

The charity’s ‘gas and electricity arrears information page’ saw a 388% increase monthly increase in page visits between August and September.

These new trends emerged before some of the high-profile cost pressures that have subsequently emerged (such as the increase in energy bills, and the changes to Universal Credit).

For the first time since April 2020, Covid fell out of the top five reasons cited by new clients for their debt. This suggests that debt arising from the pandemic is evolving from being a driver of new problem debt into a legacy issue affecting people with existing problem debt. Its ongoing influence should not be under-estimated, however. The £360 million of rent debt accumulated during the pandemic, for example, continues to exert an alarming risk of rising evictions over the coming months.

Credit cards, personal loans, overdrafts, council tax arrears, and catalogue debts were the most common debt types held by those who turned to StepChange for help in September, each held by over a third of new clients.

56% of new clients in September were in employment, with 22% unable to work for health or caring reasons, or of retirement age.

Despite some welcome measures in last week’s Budget, StepChange anticipates that the pressures on the lowest income households experiencing problem debt will remain acute heading into the winter.

Especially given the inflation arising from the rising cost of essential goods such as food and energy, the charity is worried that many poorer households in debt will not be able to make ends meet over the coming months, and will turn to borrowing more or falling behind on bills, in an effort to meet their essential needs.

Commenting on the September data, StepChange Head of Policy, Research and Public Affairs Peter Tutton said:

"Clients who turned to us for help in September were already exhibiting some alarming warning bells about the cost pressures now emerging, such as energy prices, that risk forcing more lower income households into debt over the coming months. The Government and regulators need to be attuned to these risks, and ready to take further steps to help alleviate pressure if we are to avoid a rising debt crisis, especially among lower income households.

"The latest Bank of England borrowing data out today shows a net increase in consumer credit, driven by rising borrowing on credit cards. While this isn’t necessarily reflective of a cost of living squeeze, we do know that people often turn to credit cards to make ends meet – they are the most common form of debt among StepChange clients."

Notes to Editors

  • You can access StepChange’s September client data here
  • You can access the Bank of England’s latest Money and Credit report here

Media enquiries

General – 0207 391 4598 // press@stepchange.org

Out of hours – 07985 404153

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