Debt charity StepChange has warned that warned that record numbers of households are vulnerable to future economic turbulence.
It is urging the government to prioritise preventing household debt in its upcoming Queen’s Speech.
A record 331,337 people contacted StepChange for help with their debts in the first six months of 2019.
The charity’s latest Statistics Mid-Year Update reveals that of the 190,484 new StepChange clients who received full debt advice, the average level of unsecured personal debt was £13,799. This represents a rise of 2% in the past six months and 6% since 2016.
Meanwhile, 31% of new clients’ outgoings were more than their incomes – the average monthly shortfall for clients with deficit budgets is £365.
The figures also reveal that unexpected life events are the three biggest causes of problem debt, with those experiencing a reduction in income (18%), injury or illness (16%) or unemployment or redundancy (16%), making up the bulk of new clients.
StepChange said these key indicators underline the growing number of households in the United Kingdom struggling to keep their heads above water, particularly when faced with a sudden change in personal circumstances.
Phil Andrew, CEO of StepChange Debt Charity, said: “These statistics provide a sobering assessment of the scale of problem debt in this country. Across the board we are seeing red flags, including worrying proportions of new clients falling into debt due to reduced income, illness or because they rely on credit to pay for day-to-day living expenses.
“Clearly more and more households are struggling to hang on and are ill-equipped to deal with any economic shocks the future may hold.
“These figures must act as a wake-up call to the government, who have a real opportunity to tackle some of the drivers of debt in the upcoming Queen’s Speech and beyond. By taking concerted action to curb unlawful bailiff behaviour and waking up to the impact the five-week wait for Universal Credit is having on those who have experienced a sudden drop in income, it can go some way to stemming the rising tide of those in problem debt.”
