Negative budget clients reach highest proportion in six months

A third of new clients who received debt advice from StepChange in March 2022 had a negative budget, meaning their income did not cover their essential outgoings, the charity's monthly client data report shows. The 33% figure is the highest proportion recorded in the previous six months and is four percentage points above the 29% seen in January 2022¹.

Almost 15,000 new clients received full debt advice from StepChange in March, a higher proportion of those who approached the charity than in previous months¹. The increased cost of living was among the three most commonly cited reasons for debt among new clients, cited by 13% of them. In September 2021, 7% of new clients gave this as a main reason for debt¹.

The report also found a small increase in the proportion of new clients with arrears on their gas bills, but said there had not been a substantial rise in clients behind on energy bills over recent months¹. Credit cards remained the most commonly held debt type among new clients, and council tax remained the most commonly held household arrears type¹.

StepChange said it continued to advise a disproportionate number of single parents, women, younger age groups and clients renting their homes¹.

Why it matters for households

A negative budget means a household's income falls short of its essential costs, so there is nothing left to put towards debt repayments without cutting spending further or missing payments. The March 2022 figure covers people who approached StepChange for advice that month, not the population as a whole, so it describes the circumstances of new advice clients rather than all UK households¹.

The rise from 29% in January to 33% in March is a change over two months in the share of new clients in that position¹. The report does not break the figure down by nation, age or household type, and it does not give the size of the shortfall these clients faced. It also does not report how many clients had a negative budget in earlier periods beyond the six months to March 2022¹.

The cost of living appears in the data as a stated reason for debt rather than a measured change in prices: 13% of new clients named it in March 2022, against 7% in September 2021¹. The report does not say which specific costs those clients meant.

What happens next

StepChange publishes a monthly client data report covering new clients who first received debt advice in the relevant month. No date for the next edition is given in the March 2022 report¹.