One in five mortgaged clients of StepChange Scotland were in mortgage arrears in the second quarter of this year, new data has revealed.
This figure marked a sharp increase in debt, up from almost one in seven (15%) in the second quarter of 2022.
This was alongside a year-on-year rise in the proportion of mortgaged clients, up from around one in eight (13%) to around one in seven (15%).
A high proportion of clients contacting the charity cited a rising cost-of-living increase as the main driver of their debt.
Data covering April to June 2023 revealed that 28% of new clients attribute a cost-of-living increase as their main reason for debt, which has risen by 12 percentage points year-on-year.
The figures also showed a jump in the proportion of new clients with both gas and electricity arrears, among those with a responsibility for paying this bill type – 36% of clients were in arrears with their gas bills in Q2, which rose by nine percentage points year-on-year.
32% of new clients were in arrears with their electricity bills in Q2, compared with 27% during the same time period in 2022.
Sharon Bell, head of StepChange Scotland, said: “After 13 consecutive interest rate rises, we are now beginning to see the proportion of new clients in Scotland with mortgage arrears creep up, which is concerning considering the wider cost of living pressures, and how many clients are also struggling with other types of debt.
“While a smaller proportion of our client base are home-owners, the rise this quarter indicates the immense pressure on mortgage holders’ finances, which will also extend to private renters as landlords seek to pass on increasing debt servicing costs.”
She added: “Energy bills may now have dropped and are less of a burden on people’s finances during the warmer months, but the effect of a year of high prices has led to a build-up of unsustainable energy arrears for many.
“With the energy price cap still high compared to pre-2022, the winter risks fuelling more difficulty for financially vulnerable households.
“The UK and Scottish Governments must be ready to intervene with support for struggling households as the situation for mortgage holders and renters worsen, while lenders must be attuned to the difficulties people are facing – proactively identifying and offering support to customers who are falling into problem debt, while effectively signposting them to free debt and money advice.”
