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Making ends meet: Insights from StepChange advice clients

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One in three new StepChange clients have a negative budget: this means that, after a debt advice session and budget counselling, their expenses exceed their income.

In late 2021, StepChange interviewed a group of clients with a negative budget to learn more about their experience and insight: we aimed to better understand causes of negative budgets and problem debt, coping strategies and the effectiveness of local and national support. 

Several key themes emerged:

1. People struggle for too long before accessing help

"[Being turned away by local support] was off-putting because I thought, ‘If they can't help me, no one can’, and I didn't know about debt advice. [If I had] I would have definitely gone to them first." - Becca

For most participants, living with a negative budget caused anxiety, stress and health problems. Some had experienced traumatic events. These factors made it difficult to cope with their financial situation and access help and support.

Poorly designed support sometimes discouraged those who reached out for help. This pattern led to extended experiences of financial difficulty and contributed to avoidable harms.

2. Using credit to cope with financial difficulty compounded problems

"[We] couldn't cope with the bills and so we started using credit cards. We were just taking one credit card after another after another to help with the household bills and eventually we got into this state where we were just reliant on credit cards." - Holly

Participants had often used credit to keep up after a fall in income or to meet shortfalls in essential costs, until doing so became unsustainable. Many participants had struggled with debt servicing costs over a number of years.

3. Universal Credit does not provide enough support for a dignified standard of living

"We were scratching around, and then I got made redundant that's when it got really hard. We went on [Universal Credit]: it paid the rent and paid a tiny bit [after that] but we couldn't live off it. We we're really worried about paying the bills then." - Natalie

"If I could address one thing it would be how other people see [Universal Credit] because the last seven months I've lived on £4,000. It's really difficult to live on four grand in seven months." - Eric

Most participants relied on social security income at the time of our interviews and found payments too low to meet an adequate standard of living.

Their testimony of hardship reinforces the negative social consequences of stagnation in the value of social security payments. This problem is compounded by design problems in the Universal Credit system, such as a lack of stability in payments and deductions that further reduce the value of support.

Implications for policy makers

Our interviews participants offered a number of important insights and suggestions, ranging from what would have helped prevent their problems to ideas to make access to support and recovery from problem debt easier.

Participants’ insights point particularly to the need to engage those who are struggling as early as possible through sensitively designed communication and engagement strategies.

Download our report for more details

Want more information?

Email us to discuss our personal debt statistics and other debt research across the UK. policy@stepchange.org