Debt news in 2025
18 stories, newest first.
- November 2025
Government accepts key recommendations of Sayce review on Carer's Allowance overpayments
The government has accepted key recommendations of the Sayce review into Carer's Allowance overpayments, with most affected carers to have their cases reassessed automatically and repayments potentially refunded.
StepChange updated its Breathing Space suitability criteria, reducing registrations
StepChange changed its Breathing Space suitability criteria in November 2025, and Insolvency Service figures show registrations for the debt respite scheme running well below year-earlier levels through 2026.
- October 2025
NAO publishes value for money report on DWP's tackling of benefit overpayments due to fraud and error
The National Audit Office says benefit overpayment levels remain too high but improved in 2024-25, and that the Department for Work and Pensions must now turn its strategy into effective implementation.
HMRC restarts taking tax debts directly from bank accounts
HMRC has relaunched its Direct Recovery of Debts power, allowing it to take unpaid tax directly from bank accounts and cash Isas in a test and learn phase after pandemic suspension.
- September 2025
DWP reassessing Carer's Allowance overpayments from 2015 to 2025
The Department for Work and Pensions is reassessing Carer's Allowance overpayments made between 10 April 2015 and 2 September 2025, with affected claimants possibly due a refund or a reduced or cancelled debt.
Average household bill arrears 10% higher than a year earlier
Average household bill arrears among new StepChange clients reached £4,447 in September 2025, 10% higher than the £4,059 recorded a year earlier, the debt charity's monthly client data shows.
Fuel and electricity arrears rose in September 2025
StepChange reports that 46% of clients responsible for dual fuel bills were in arrears in September 2025, with electricity arrears at 29% and average household bill arrears at £4,447.
Personal loan debt among StepChange clients up three percentage points year on year
Half of StepChange clients who sought debt advice in September 2025 were in debt because of personal loans, up from 47% in September 2024, as average household bill arrears rose 10% to £4,447.
- August 2025
Reports of fake HMCTS debt collection letters spike
Which? has reported a spike in fake debt collection letters claiming to come from HM Courts & Tribunals Service, alongside cold calls from fraudsters posing as debt advisers.
- July 2025
Reimagining Insolvency report launched
The Money Advice Trust has published Reimagining Insolvency, a report proposing a single, flexible insolvency framework for England and Wales with two routes out of problem debt.
- June 2025
DWP to reassess Carer's Allowance overpayment cases after review found it acted unfairly
The DWP will reassess Carer's Allowance overpayments made between April 2015 and September 2025, after an independent review found it acted unfairly, with debts reduced, cancelled or refunded.
- May 2025
New Consumer Energy Debt Advice service announced
A new Consumer Energy Debt Advice service led by Citizens Advice with the Money Advice Trust and StepChange will help clients resolve energy debt problems and access energy efficiency schemes.
- April 2025
Welsh Government opens consultation on Council Tax administration and enforcement in Wales
The Welsh Government has opened a 12 week consultation on how unpaid Council Tax is collected in Wales, proposing changes to reminder notices, final notices and liability order timing.
Debt Rescue Scheme testing begins and Universal Credit data used for Council Tax reduction
The Welsh Government is testing a Debt Rescue Scheme in three areas and using Universal Credit data to help reduce Council Tax bills from April 2025.
DWP to check all Carer's Allowance overpayment alerts
From April 2025 the Department for Work and Pensions will check every Carer's Allowance overpayment alert it receives and investigate past overpayments, after years in which not all cases were reviewed.
Fair Repayment Rate introduced
The Fair Repayment Rate took effect in April 2025, cutting the maximum that can be deducted from a Universal Credit standard allowance for debt repayments from 25% to 15%.
- March 2025
Consultation on statutory debt solutions held
An independent review of Scotland's statutory debt solutions has published 52 recommendations after a March 2025 consultation, with the Scottish Government to respond after the Parliamentary Election.
- January 2025
Debt Advice and Information Package required for diligence on the dependence warrants
From 20 January 2025 creditors in Scotland must give a Debt Advice and Information Package before applying for a warrant for diligence on the dependence, under rules covering enforcement against debtors.