Cost of living becomes most cited reason for debt

The cost of living increase was the most cited main reason for debt among people seeking advice from StepChange in August 2022, at 22% of new clients, the charity's monthly client data report said¹. The report, published in August 2022, said this followed three consecutive months of two percentage point increases¹.

The number of new clients receiving full debt advice peaked in August compared with previous months in 2022, with more clients using the online channel¹. The charity received 340,000 visits to its website in August, a 9% increase on July 2022, and its benefits calculator webpage received the most traffic, up by 711% between July and August¹.

Around a third of clients, 32%, were in receipt of Universal Credit, a one percentage point increase on July 2022¹. Just under one in five clients, 18%, were homeowners, a slight increase on the previous month¹.

The proportion of clients with household arrears was fairly stable compared with the previous calendar month, and August was the first month in 2022 in which the proportion of clients with electricity and gas arrears did not increase further¹.

Why it matters for households

The figures describe the circumstances of people who approached one debt charity for advice, not the whole population, and they cover a single month. Within that group, the cost of living had moved to the top of the list of reasons given for debt, and the share citing it had risen by two percentage points in each of the three months to August 2022¹.

The report also shows where pressure was showing up in household budgets. Arrears on electricity and gas stopped rising in August after increasing in earlier months of 2022, while household arrears overall were broadly unchanged on July¹. The rise in traffic to the benefits calculator, up 711% between July and August, points to more people checking what support they were entitled to¹.

For anyone dealing with problem debt, the site's guide to debt help, solutions and rights sets out the options and how the process works, and the debt hub collects the related material.

What happens next

StepChange said the August 2022 report was the latest in its series of monthly client data reports, with previous reports for 2022, 2021 and 2020 also published¹. No further dated steps were reported.