Debt charities report unprecedented demand after Christmas

A number of major debt charities reported in early January 2026 that "unprecedented" numbers of people had been seeking help with their debts, according to the 13th Financial Wellbeing Tracker from the Personal Finance Research Centre at the University of Bristol¹. The finding sits alongside survey results, from nearly 6,000 households surveyed in November 2025, showing that over 4 million households (15%) were in "serious financial difficulties" heading into winter, around 1.3 million more than four years earlier¹.

The Tracker sorts households into four categories using a score out of 100, based on seven survey questions covering whether they can meet their financial obligations and the resources they have to deal with an economic shock¹. Those scoring under 30 are classed as in serious financial difficulties, 30 to 49 as struggling, 50 to 79 as exposed, and 80 to 100 as financially secure¹.

The report describes limited improvement in overall financial wellbeing despite cost-of-living pressures easing somewhat, with growth in the exposed group from 34% to 37% since May 2025 driven mainly by a fall in the secure group from 26% to 24%¹. It also records an uptick in borrowing on credit cards, to 40% from 38% in May 2025, and via Buy-Now-Pay-Later, to 18% from 15%, with BNPL growth fastest among households aged 40 to 69¹. A third (34%) of low-income working age households had been declined for credit in the previous six months¹.

The report sets the figures against government measures already announced. In November 2025 the Government launched its Financial Inclusion Strategy, which proposes promoting workplace payroll savings schemes, expanding the affordable credit market through a £30 million credit union transformation fund, improving public sector collection practices, increasing funding for specialist advice, and setting up a new Consumer Energy Debt Advice service for consumers in England and Wales¹. The Child Poverty Strategy, published in December 2025, reports 4.5 million children (31%) in relative low-income households after housing costs, and proposes removing the two-child limit for the child element of Universal Credit, investment in social and affordable homes, and a £1 billion Crisis and Resilience Fund for England¹.

Why it matters for households

The survey covers householders who are solely or jointly responsible for household finances; people responsible only for their own personal finances, most of whom were under 25 and living with their parents, are not included¹. Among those in serious financial difficulties, 87% held nothing in savings, 35% were behind on household bills, 40% had someone disabled in the household, and many were renters, private (28%) or social (34%)¹. Among the struggling group, 92% said meeting bills and credit commitments can be a struggle and 71% had used credit in the past six months¹. The report also notes that women generally reported lower confidence than men in making decisions about financial products and services, with the gap widest among younger adults¹.

On costs, the report states that the energy price cap rose by an average of £3 per year from January 2026, and that from April 2026 households will see the costs of certain environmental policy schemes removed from their bills¹. It cites projections that real household disposable income growth per capita will slow to 0.2% in 2026, alongside a rise in unemployment to 5%¹.

What happens next

The report says the Financial Inclusion Strategy mainly targets households it classes as struggling or in serious financial difficulties, and that delivery of both strategies now falls to the organisations involved¹. The Tracker does not report further dates for the debt charity demand it describes beyond early January 2026¹. Anyone dealing with problem debt can read our guide to debt help, solutions and your rights, including how joint debts and a partner's debts are treated.