StepChange Debt Charity reports a 15% year-on-year increase in demand for debt advice in March, suggesting the beginning of an escalating debt crisis due to a sustained period of high inflation.
Bank of England’s Money and Credit statistics reveal consumer credit borrowing remains high, with the annual growth rate for all consumer credit increasing for the sixth consecutive month, reaching 7.9% in March.
StepChange’s client data reveals more than a quarter (26%) of clients cite the cost of living as their main reason for debt, and energy arrears continue to rise.
In March, 55% of clients responsible for dual fuel bills were in arrears, a 4% increase since January 2023.
StepChange CEO, Vikki Brownridge (pictured), said: “There’s a clear risk that without further interventions from the government, more people will be turning to credit to make ends meet, many of whom are already in arrears on their energy bills, council tax, rent, and mortgage.”
Brownridge called for targeted funding to write off energy bill arrears and a long-term social tariff for energy to protect financially vulnerable households.
