Cost of living increase remains most common reason for debt at 26%

The cost of living increase was the most common reason for debt among people seeking advice from StepChange in June 2023, cited by 26% of new clients, the charity's monthly client data report shows¹. That is one percentage point lower than May 2023 (27%) but eight percentage points higher than a year earlier, when it stood at 18%¹.

In June 2023, 15,677 clients accessed full debt advice, which StepChange said was 11 percentage points higher than June 2022 (14,132)¹. The charity's website had 309,346 users in June 2023, against 294,698 in June 2022¹.

The report also recorded month-on-month rises in some types of debt. The proportion of clients with credit card (66%), personal loan (45%) and overdraft (33%) debts each increased by one percentage point between May and June 2023¹. Among clients responsible for paying each bill type, the proportion in arrears on council tax (33%) and water (23%) rose by two percentage points each month-on-month, levels StepChange said were last seen in March 2023¹.

The share of clients in receipt of Universal Credit was unchanged at 38% in June 2023, after rising three percentage points between April (35%) and May (38%)¹.

"The most common reason for debt continues to be a 'cost of living increase' at 26% in June 2023, which is one percentage point lower than May 2023 (27%), although eight percentage points higher than a year ago (June 2022 = 18%)."

StepChange, Monthly Client Data Report, June 2023¹

Measure, June 2023	June 2023	Comparison
Cost of living increase as most common reason for debt	26%	27% in May 2023; 18% in June 2022¹
Clients accessing full debt advice	15,677	14,132 in June 2022¹
Clients in arrears on council tax	33%	Up two points month-on-month¹
Clients in arrears on water bills	23%	Up two points month-on-month¹
Clients in receipt of Universal Credit	38%	Unchanged from May 2023¹

Why it matters for households

The figures describe people who have already sought debt advice from one charity, so they are not a measure of household finances across the UK as a whole. They do show what is driving people to seek help: a cost of living increase was the single most common reason given in June 2023, and it was named eight percentage points more often than a year earlier¹.

The arrears figures relate only to clients with a responsibility for paying each bill type, so the 33% council tax and 23% water figures are shares of those bill-payers, not of all clients¹. Both were at levels last recorded in March 2023¹.

The report does not give amounts owed, income levels or regional breakdowns, and it does not say how many of the 15,677 clients went on to use a particular debt solution. Those details have not been reported.