Cost of living becomes most cited reason for debt among StepChange new clients

An increase in the cost of living was the single most cited reason for debt among new clients of StepChange Debt Charity who first received advice in June 2022, cited by 18% of them, the charity reported in its monthly client data report for that month¹. The same figure stood at 7% in September 2021¹.

StepChange said clients who gave an increase in the cost of living as a main reason for debt were more likely than its overall client population to be women, in some form of employment, and single parents¹. The proportion of new clients in full time employment rose to 42% in June 2022, four percentage points higher than the 38% recorded in June 2021¹. The charity said the situations of new clients overall remained relatively similar to previous months and years, and that it continued to advise a greater proportion of single parents, renters, younger age groups and women than in the wider UK adult population¹.

Later StepChange figures put the share citing a cost of living increase higher still. The University of Bristol's Personal Finance Research Centre, in a report published in October 2025, said that in 2024 170,928 clients completed a full debt advice session, with a cost of living increase the most common reason for debt, cited by 21% of new clients². A Scottish government review of emerging evidence, published on 20 December 2024, reported that 25% of new UK StepChange clients cited the cost of living in 2023, an increase of seven percentage points on 2022 and 19 percentage points on 2021, when the figure was 6%³. It said the reason was also cited by 25% of new Scottish StepChange clients in 2023, an increase of 2% since 2022³.

The Scottish government review also set out how demand for advice and the amounts owed have changed since the start of the cost of living crisis³:

The review said client average arrears were the highest in five years, rising 30% between 2019 and 2023³. It also cited Money and Pensions Service figures showing that 39% of UK adults either needed debt advice or were at risk of needing it soon, and that 15%, equivalent to 8.1 million people, needed debt advice to avoid their situation worsening³. It noted that figures from debt advice services do not reflect people in debt who do not seek advice, citing FCA research that only 21% of adults who felt heavily burdened by their debts and 29% of those who had fallen behind on or missed bill payments had sought help in the last year³.

Why it matters for households

The figures describe who was seeking help and why, not what any household should do. They show that from 2021 onwards a rising share of people arriving at debt advice named the cost of living as the main reason they were in debt, and that the amounts they owed grew over the same period. Average unsecured debt among UK StepChange clients rose from £11,000 in 2021 to £14,654 in 2023, and among Scottish clients from £12,730 to £16,337³. Arrears reached their highest level in five years³.

The review also points to a change in the shape of the problem: it says problem debt is now driven by low income, with borrowing used to cover essentials or pre-existing arrears rather than to build assets, and that 21% of people had borrowed to pay for essentials in the previous six months³. A deficit budget, where income does not cover essential outgoings, applied to 32% of new UK StepChange clients in 2023 and 31% of new Scottish clients³. For households in that position, the practical question at advice stage is usually how income and essential spending are set out, which is where the Standard Financial Statement is used.

The review cautions that its figures cover only those who reach a service. It cites FCA research that most adults who felt heavily burdened by debt, or who had missed payments, had not sought help in the past year³. It also notes that some services measure new clients only while others count new and existing clients, and that figures may understate need because services are overstretched and handling more complex cases with fewer volunteers³.

What happens next

The Scottish government review was published on 20 December 2024 and draws on data up to 2024³. It reports StepChange UK monthly data for April 2024 showing 16,046 new clients seeking debt advice, 11% higher than April 2023³, and Citizens Advice figures for England and Wales showing debt advice given to 35,475 clients in January 2022, 43,963 in January 2023, a record 48,482 in January 2024, and 43,006 in June 2024³. The University of Bristol report, published in October 2025, notes that Ofgem put in place new and updated rules at the end of 2023 to make it easier for domestic customers to contact their supplier, and refers to a new Consumer Energy Debt Advice service led by Citizens Advice with the Money Advice Trust and StepChange². No further dates for those measures have been reported.