Cost of living increase remains most common reason for debt among StepChange clients

A cost of living increase remained the most common reason for debt among people seeking help from the debt charity StepChange in May 2023, cited by 27 per cent of new clients, up from 16 per cent in May 2022, according to the charity's monthly client data report¹.

The charity said 15,483 clients accessed full debt advice in May 2023, higher than the same month in previous years, including May 2022 (14,393) and May 2021 (12,459)¹. Its website had 315,000 users in May 2023, unchanged month on month¹.

Among clients responsible for paying dual fuel bills, 57 per cent were in arrears in May 2023, six percentage points higher than January 2023 and May 2022, when the figure was 51 per cent in each month¹. The proportion of clients receiving Universal Credit rose three percentage points between April (35 per cent) and May 2023, to 38 per cent¹. In May 2023, three in five clients (60 per cent) were in some form of employment, four percentage points higher than May 2022 (56 per cent)¹.

"A 'cost of living increase' remains as the most common reason for debt and has increased by eleven percentage points between May 2022 (16%) and May 2023 (27%)."

StepChange, Monthly Client Data Report, May 2023¹

Measure	Earlier figure	May 2023
Clients citing cost of living increase as reason for debt	16% (May 2022)	27%
Clients in arrears with dual fuel bills	51% (January 2023 and May 2022)	57%
Clients in receipt of Universal Credit	35% (April 2023)	38%
Clients in some form of employment	56% (May 2022)	60%
Clients accessing full debt advice	14,393 (May 2022)	15,483

Why it matters for households

The figures describe people who approached StepChange for debt advice, not the population as a whole, so they show the circumstances of those already in difficulty rather than a rate applying to all households. The report covers new clients who first received debt advice in May 2023¹.

For that group, the cost of living increase was the single most commonly given reason for debt, and its share rose by eleven percentage points over the year to May 2023¹. Arrears on dual fuel bills affected 57 per cent of clients with responsibility for that bill type, up from 51 per cent in January 2023 and May 2022¹. The share receiving Universal Credit rose from 35 per cent in April 2023 to 38 per cent in May 2023¹.

The report also records that 60 per cent of clients were in some form of employment in May 2023, against 56 per cent in May 2022, so a majority of those seeking advice were in work¹.

What happens next

StepChange describes the May 2023 report as the latest in a series of monthly client data reports, with earlier editions listed for 2020, 2021, 2022 and 2023¹. No further publication date is given in the report.

Sources2 cited