Negative budgets among new StepChange clients rose to 32%

The share of new clients in a negative budget when they received advice from StepChange reached 32% in April 2022, the debt charity reported, up three percentage points from 29% in the same month of 2021¹. A negative budget means a household's income does not cover its essential outgoings and debt repayments.

The charity said 12,500 clients accessed full debt advice in April 2022, down from around 15,000 in March. It described this as a similar seasonal trend to 2021, noting that each individual month in the first quarter of each year has seen more clients needing debt advice than in April¹.

The cost of living featured more often among the reasons clients gave for their debt. In April 2022, 15% of new clients cited a cost of living increase among their main reasons, making it the second most cited reason, against 7% in September 2021¹.

The report also recorded a rise in the proportion of clients receiving Universal Credit, to 34% in April from 32% in March¹.

Behind on the most common unsecured debts, the picture differed by type. The proportion of new clients behind on credit cards, catalogues and payday loans fell in April compared with previous months, and the proportion with household arrears such as council tax also decreased. Energy arrears, however, continued to increase slowly¹.

Why it matters for households

A negative budget means that after essential bills and debt payments, there is nothing left, and often a shortfall. For the roughly one in three new StepChange clients in that position in April 2022, the shortfall existed at the point they sought advice, before any repayment plan was set¹.

The figures cover people who came to StepChange for advice in April 2022, not the whole population, so they describe that group rather than all UK households. The rise in Universal Credit receipt among clients, from 32% to 34% between March and April, indicates that a larger share of those seeking help were on means-tested benefits¹.

The shift in reasons for debt matters because it points to pressure from rising everyday costs rather than only from existing borrowing. Cost of living was cited by 15% of new clients in April 2022, more than double the 7% recorded in September 2021¹. At the same time, fewer clients were behind on credit cards, catalogues and payday loans, while energy arrears continued to creep up¹.

What happens next

StepChange publishes a monthly client data report, and the April 2022 edition links to the March 2022, February 2022 and January 2022 reports¹. No further figures beyond April 2022 have been reported here.