Cost-of-living crisis leaving more new clients struggling with essentials

Based on client data from December 2022, the proportion of those in gas arrears rose by three percentage points from November, going from 24% to 27%. December also saw a two percentage point increase in clients with mortgage arrears, hitting 17%, and a one percentage point increase in both council tax – 34% – and rent – 21% – arrears compared to last month.  

The cost of living remains the main driver of debt among new clients, with a one percentage point month-on-month increase to 22% in December 2022. 

As for the proportion of clients with a negative budget, this is up by two percentage points to 35%, while clients in receipt of Universal Credit was at 34%. Additionally, clients who claim Universal Credit are more likely to be under 40 – 67% – identify as a woman – 73% – have children – 60% – and around a half – 48% – also have a negative budget. 

Additionally, while the number of new clients accessing full debt advice fell, StepChange’s emergency funding webpage saw a 15% increase in views between November – 20,000 – and December 2022 –23,000. 

Richard Lane, director of external affairs at the charity, said: “December’s rise in the proportion of new StepChange clients in arrears on priority debts like gas, mortgage payments and council tax, combined with a month-on-month increase in the proportion of new clients unable to make ends meet, is a real cause for concern. 

“We have had an exceptionally busy start to 2023 and while January is always a busy month, the relentlessly high demands of the cost-of-living crisis on people’s finances are clearly forcing more and more people into difficulty.  

“The Bank of England’s new data suggests that a consistently high number of people are turning to borrowing to mask a shortfall in income or to cover unexpected expenses. With our own data showing a higher proportion of people unable to keep up with even the most essential bills, the warning signs of substantially more people being swept into financial difficulty are there for all to see.”