One new person contacts StepChange for help every 51 seconds
By Josie Warner, Research Insight and Planning Officer
In 2017, 620,000 people contacted StepChange Debt Charity for help with their problem debt. That’s one new person every 51 seconds.
Our latest Statistics Yearbook presents some new findings as well as a number of existing trends highlighted in previous years, which are continuing along the same trajectory.
Younger people struggling
In previous yearbooks, we reported an increase in the proportion of younger clients contacting us for advice. Our latest data shows this is still the case, with almost two thirds of people contacting us for advice aged under 40.
Perhaps unsurprisingly, most new clients aged under 40 are seeking debt advice through our online debt advice tool.
However, our data also indicates the proportion of those aged under 40 contacting the charity over the phone has also been increasing. 51% of all new clients contacting us over the telephone were aged 18–39.
Two in five behind in household bill arrears
Another continuing trend among our clients concerns household bills. For the past five years, we’ve seen a similar proportion of clients falling behind on at least one of their essential household expenditure such as water bills, energy bills, council tax or rent.
Alarmingly, two in five of our clients are in arrears with at least one of these bills
We’ve seen a particular rise in the proportion of clients falling behind on hire purchase (often used to buy a car, or household appliances).
Although only very few clients have a hire purchase agreement, of this group, 16.2% were in arrears in 2015 (when we started to record this). However our most recent analysis for 2017 shows the proportion in arrears has risen to 20.2%.
A rise in single parents seeking advice
In terms of family composition, our new clients are most likely to be single with no children (37.1%), or in couples with children (26.8%).
When compared against ONS estimates, the proportion of StepChange clients in couples with children is only 4% above the national average (23%), and more than 1% for singles without children (36% national average).
However, the proportion of single parents seeking advice has increased by 2% since 2015.
Albeit only a small percentage increase, this figure is already alarming as a far larger proportion of our clients are single parent family households (21.5%) compared against the ONS national average (6%).
Credit cards are top of the table
Although not the largest monetary average debt, credit cards continue to dominate as the most common debt type among our clients.
A staggering two thirds of our clients held at least one credit card debt in 2017, and credit card debt accounts for 40% of all the debt we see
StepChange has been calling for legislators, the FCA and firms to do more to help those trapped in persistent credit card debt.
After years of decline we’re also seeing a small rise in the proportion of clients with payday loan debts between 2016 (16.3%) and 2017 (16.8%). Although only a very small rise, this will be an interesting trend to track in the future.
What can we do next?
In theory, for every 100 people in the UK, one of them contacted StepChange Debt Charity last year.
If you take into account that we’re not the only charity providing debt advice and support, the issues we see are just the tip of the iceberg for problem debt.
With many households facing stagnant or falling real incomes and further base rate rises likely on the horizon, the road ahead for those in or at risk of financial difficulty may continue to be rocky.
To help those struggling, StepChange has long been advocating for a ‘Breathing Space’ scheme to provide protection in law for people struggling with their debts.
We’re really encouraged by the government’s commitment to its introduction, and we’re hoping that the final version of the scheme will provide meaningful support to those struggling with financial difficulty.
To find out more about the 2017 Statistics Yearbook download the full report.
