Cost of living remains most commonly cited cause of debt among StepChange clients in September

Once again, September saw the cost of living being the most commonly cited reason for debt among new StepChange clients, with more than one in five (22%) saying it was a cause of difficulty.

The proportion of clients with energy bill arrears also continued to creep up. Among clients with a responsibility for paying dual fuel bills, the proportion of clients in arrears with these bills has increased by two percentage points for the second consecutive month, to 56% – up from 45% in September 2021. New clients with electricity (31%) and gas (26%) arrears are also up by one percentage point each month-on-month.

The volume of clients who received full debt advice in September 2022 (14,815) is slightly lower than August 2022 (15,340), although client volumes in September 2022 are 13% higher than they were in September 2021 (12,819).

Nearly three quarters (73%) of all those clients who received advice completed their advice journey online – although it should be noted that people are able to switch between telephone and online advice at any point in their journey.

During September, there were monthly increases in the proportion of clients with arrears on a number of priority bills including dual fuel, electricity, gas, rent and mortgage. By contrast, there were decreases in the proportion of clients with personal loans, overdrafts or payday loans, at the time of advice – while the proportion with credit card debt remained the same as in August, at 64%.

Richard Lane, Director of External Affairs at StepChange Debt Charity, said:

“The increase in the proportion of new clients with arrears on priority bills is worrying. Falling behind on essential bills is a stark manifestation of the cost of living crisis hitting people without financial resilience and savings to fall back on.

“StepChange saw the highest proportion of single parent clients this year, with 26% of all clients in September single parents. The consequences for children growing up in households facing debt and hardship are overwhelmingly negative, and as we head into winter we especially need to see a real commitment to help for those who simply cannot make ends meet.

“While recognising the pressure on public finances, we see it as imperative that benefits should be uprated in line with inflation, and brought forward early, to allow those households relying on means-tested benefits a fighting chance of getting through winter with fewer problems than they will otherwise face.”