StepChange Debt Charity has seen a massive increase in the number of people seeking debt advice, as they can’t keep up with ever-increasing bills.
The debt charity said the proportion of its clients seeking help with keeping up with bill payments has risen 25% in the past year – and things could get worse from April, when a raft of price increases take effect.
The charity has released figures from its 2024 Statistics Yearbook today (24 March) to coincide with the start of Debt Awareness Week.
The figures show that the average StepChange client is £3,911 in arrears on household bills, a jump of 25% from £3,124 in 2023.
Overall, the average amount of debt per StepChange client jumped 7%, from £16,706 in 2023 to £17,936 in 2024 – this includes all arrears and unsecured debt.
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Mortgage, energy and council tax arrears all increasing
Mortgage arrears among StepChange clients saw the most dramatic rise, soaring by 69% from £6,054 in 2023 to £10,239 in 2024. Worryingly, almost one in five (18%) clients with a mortgage are now in arrears. However, the proportion of StepChange clients with a mortgage remains low, at 14%.
Energy arrears have risen by 28% year-on-year, with a striking 58% jump since 2022, with the typical amount owed rising from £1,485 to £2,340 in 2024. Energy bills are set to rise again from April. Meanwhile, council tax arrears have increased by 14% in the past year to £1,972 in 2024.
Overall, the Statistics Yearbook reports a mixed picture for personal debt among StepChange clients in 2024. Fewer clients are citing the cost of living as their main reason for debt than in 2023. However, overall debt levels have deepened significantly, and the charity said many have struggled to rebuild financial stability after years of economic turmoil.
Negative budget
This is well illustrated by the proportion of clients with a ‘negative budget’ after debt advice, which has returned to 2022 levels, and now stands at 30%.
A negative budget occurs when a person or household’s essential expenses (like housing, food, and utilities) exceed their income, leading to a shortfall in their finances.
StepChange found the average monthly deficit among these clients has deepened by £69, from negative £464 in 2023 to negative £532 in 2024.
StepChange has also seen a growing trend of more clients in employment. In 2024, three in five (60%) clients were in some form of employment, figures that were 59% and 56% in 2023 and 2022 respectively.
Calls for more government focus on household finances
Ahead of the Budget on Wednesday and with multiple household bill increases coming in April, StepChange is calling on the government to have a greater focus on long-term financial resilience for households.
Vikki Brownridge, CEO of StepChange Debt Charity, said: “As we mark the start of Debt Awareness Week, it’s important to shine a light on the reality for those facing debt issues in 2025. We’ve now seen a consistent trend of debt levels deepening over the last few years, with the most severe rises occurring in the household arrears our clients have – particularly when it comes to mortgage, council tax and energy debt. This is something [that] could worsen as many bills are set to rise further next month.
“Consistently rising living costs are pulling higher earners into debt, with more people finding work is not shielding them against financial hardship. Those on the lowest incomes face growing budget deficits and it’s a concern that this could be pushing more people to rely on credit to make ends meet.
“At this week’s Spring Statement, it’s important the government does not exacerbate hardship for the most financially vulnerable households. This should include addressing increasingly unaffordable household bills, such as energy and council tax, through targeted support aimed at delivering long-term affordability for low-income households.”
This article was first published on Mortgage Solutions‘ sister site, YourMoney.com. Read: Household bills arrears are on the up
