Two in five rationing to keep up with credit repayments

In polling conducted on behalf of the not-for-profit orgainsation by YouGov, this has resulted in people cutting back on essentials to keep up with these repayments – with more than two in five UK adults (43%) taking action such as rationing day-to-day necessities, missing essential bills or relying on help from friends or family in order to keep up with credit repayments. 

Additionally, more than one in three (35%) have cut back on utilities. 

This rationing of essentials, according to the charity, is just one symptom of the extreme pressures the last three years have had on people’s finances. Since March 2020, the number of people struggling to keep up with household bills and credit commitments has nearly tripled, rising from 7.5 million people to 22 million people.  

And while there was a slight drop between September 2022 and January 2023 suggests this number has peaked for now, it remains a dangerously high proportion of people. 

Additionally, the polling highlighted how nearly one in two people – 47% – said their financial situation is less secure than compared to the same period last year. Of those who said they now felt less secure in their financial situation, 71% said this was because energy bills had become more expensive – which is particularly worrying given April’s energy price cap rise.  

Alongside, 69% cited rising everyday costs as a reason for feeling less financially secure, while 58% cited other bills becoming more expensive. 

StepChange say these figures suggest an alarmingly large proportion of the population are running out of financial road, raising the prospect of more people becoming susceptible to long term problem debt.  

As such the charity has set out a series of challenges to the government, the Financial Conduct Authority (FCA) and other regulators to firstly protect people experiencing financial difficulty. For example, it is calling on the government to reverse its plans to raise the energy price guarantee to £3,000 in April and to expedite plans for social tariffs for energy, water and broadband. 

Meanwhile it’s calling on the FCA to strengthen its rules and guidance for firms to break cycles of desperation borrowing and prevent harmful debt spirals. 

As for Ofgem, the charity has said it must continue to prevent the installation of new pre-payment meters until it can guarantee suppliers’ practices improve, as well as ensuring those who have built up arrears have a safe and affordable route out of debt. 

StepChange’s director of external affairs Richard Lane said: “We know households experience problem debt because of a prolonged period of not having enough income to meet their basic needs.  

“Sadly, these figures show that this is a reality for a growing number of people who have seen their financial headroom eroded first by the pandemic and now by the cost-of-living crisis. No one should go without essentials to make credit repayments. 

 
“Struggling borrowers need government, regulators and creditors to step up to ensure the mechanisms are in place both to catch people before they fall into long-term problem debt and to help people already facing severe financial difficulty. With no end in sight to the cost-of-living crisis, there is no time to lose.”