Around 100,000 fewer people went through full debt advice with Stepchange Debt Charity in 2020, compared to 2019, despite the soaring numbers of individuals in problem debt.
The charity’s Statistics Yearbook for 2020 shows that only 200,000 clients went through full debt advice in 2020, compared to over 300,000 in 2019. This came as a surprise to StepChange as research shows the number of people in problem debt has rocketed from 1.7 million to 2.4 million since the pandemic began.
According to the statistics, the temporary phenomenon has come about because, despite significantly increasing pent-up demand, the temporary emergency support measures have combined to create a situation where millions of households have seen their debt problems “kicked down the road”. StepChange anticipates these to crystallise as forbearance becomes less generous or is withdrawn.
However, while the numbers of people seeking full debt advice have fallen, the demographics of those who are, have shifted.
Half of all clients in 2020 were in a vulnerable situation, up from 44% in 2019. The most common vulnerable situation was a mental health issue, affecting more than one third of all the charity’s new clients in 2020.
The proportion of clients who were single without children rose significantly, from 36% in 2019 to 44% in 2020. The charity links this growth to the increase in the proportion of clients in a vulnerable situation.
The statistics showed that women remain over-represented, with 60% of clients being women, though this is in line with previous years. Single parents also remained over-represented, as just 6% of the UK population are single parents, yet 22% of clients were this household type.
StepChange chief executive Phil Andrew said: “We all know what an unusual year 2020 was, and client statistics reinforce that. Despite problem debt increasing, and our website running red hot as a huge influx of people sought information, we actually took fewer clients through full debt advice. Many adopted a “wait and hope” approach to their latent financial difficulties, utilising emergency support.
“Looking ahead, the route out of Covid-induced debt for many households is not yet clear. We are seeking to work urgently with other stakeholders to chart a safe passage for as many households as possible.”