People Seeking Help With Debt Hits Record High in 2016

The number of people seeking help with debt problems has hit a record high in 2016, with those affected increasingly likely to be younger, working part-time and renting their home, according to new research from StepChange Debt Charity.

The charity’s Statistics Mid-Yearbook, released today, shows that over 300,000 people sought advice from StepChange Debt Charity between January and June, the highest half-year number the charity has ever seen.

Those contacting the charity in the first half of the year were struggling with a total of £2.4 billion in unmanageable debt and owed an average of £13,826 each, with credit cards, overdrafts and personal loans the most common source of debt problems. Three in ten of those contacting the charity did not have enough money to pay their essential bills and credit commitments each month.

The figures show some respite for struggling households after the number in arrears on essential bills like rent, mortgages, utilities and Council Tax had stabilised after years of substantial increases. But the charity is warning that 40% of the people it sees are not able to meet essential bills, a number that remains well above the long-term average.

Work doesn’t necessarily provide a safeguard against debt

More StepChange Debt Charity clients are now in work than at any point since 2011. However, the charity’s clients are increasingly in insecure part-time work and less likely to be in full-time employment. Almost one in five (19%) are now part-time workers, up from 16% in 2011, whereas 30% of the charity’s clients are in full-time work, down from 34% in 2011.

The charity’s previous research has warned that the rise in zero hours, part-time and temporary contracts is contributing to people’s financial vulnerability, with volatile incomes making it difficult to get by and cope with sudden unexpected expenses.

Three quarters of those seeking debt help are now renting

The charity is reporting a dramatic increase in the proportion of people in debt who rent their home, with amounts owed also rising rapidly:

• 77% of clients are now renters, up from 55% in 2011
• 24% of the charity’s clients who rent are in arrears, up from 15% in 2011
• The average rent arrears now stands at £954, up from £769 in 2011, an increase of 24%.

When people are struggling with debt, they already face a battle to keep up with essential bills. As rents continue to grow faster than wages, it can leave them even more financially vulnerable.

Please see the statistics below: