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StepChange Debt Charity helps people across the UK who are facing or worried about financial difficulty. We provide debt advice, debt solutions and also mortgage advice where this could help people get their financial situation under control.

Last year over 180,000 people completed debt advice with StepChange. A quarter of them said that the increased cost of living was the main cause of their debt problems, up from 6% who said this in 2021. Polling we commissioned in September 2024 from YouGov showed:

41% of adults finding it difficult to keep up with household bills and credit commitments

That’s an estimated 22 million people under some financial pressure.

Homeowners are generally less vulnerable to problem debt, and the cost-of-living crisis has not yet resulted in a large spike in people with mortgages seeking debt advice, despite increased mortgage costs.

Our most recent client statistics show:

• Only 13% of our clients are mortgagors
• Compared to 30% who are tenants of social landlords
• And 32% who rent from private landlords

However our polling found a quarter of adults with a mortgage saying they had used credit to keep up with mortgage payments. Our research repeatedly shows that using credit to cope with payment  pressures makes people much more likely to experience serious problem debt and related harms later on. So there is a potential ‘long shadow’ debt risk continuing into the future.

The majority (84%) of mortgagors we saw in H1 2024 did not have mortgage arrears. A high number were in full time work and the main problem was with multiple unsecured debt payments. Debt advice, debt restructuring solutions and forbearance could support most of these. It is worth noting that 56% of these households included children; and 58% of these clients told us about an additional vulnerability.  So it is crucially important that people get good quality help and support from early signs of financial difficulties onward.

The 16% of homeowners seeking help with mortgage arrears (around 3% of all our clients) have more  challenging circumstances. So, although nearly half were in full time work, they were much more likely than other mortgagors to be single adult households. They were also twice as likely to be unemployed or not working because of illness or disability. Perhaps as a result, they were more likely to be in receipt of universal credit (28%) and much more likely to have negative budgets at the time they sought debt advice (58%).

What to conclude from this? 

Firstly, there is a journey from payment pressures to financial difficulties to problem debt. There are a  number of things that influence whether this journey ends in good and bad outcomes. If people get early help much harm may be avoided. Focusing messaging on giving people options and reassurance of help matters. So does good forbearance and signposting to other help, like debt advice, when people do  engage.

Secondly, it is more difficult for both lenders and debt advice to resolve financial difficulties for people  in the most vulnerable situations. Doing so will need a range of policy interventions to lower barriers to help seeking, improve safety nets, build financial resilience and ensure secure and affordable housing alternatives.

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This article was first published in Society Matters magazine