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Record number contacted StepChange over debt in 2018

A record 657,000 people contacted StepChange Debt Charity about problem debt, its 2018 Statistics Yearbook shows.

The charity received 657,930 new contacts in 2018, up from 619,946 in 2017. Around 60 percent of new contacts to the charity are now online, with around 40 percent by telephone.

 

There was a notable increase in single parents, 85 percent of them women, seeking help, its statistics reveal. In 2018, 23 percent of those who took debt advice were single parents, up from 21.5 percent in 2017, having steadily risen from 18 percent since 2014. Single parents account for just six percent of the UK population and the charity is increasingly concerned they are over-represented among people experiencing problem debt.

 

Another area to see an increase was those who have experienced a reduction in income. The top three reasons for debt are unemployment or redundancy (17 percent), injury or illness (16 percent) or other reduced income (17 percent). One in nine clients (11 percent) attribute their debt problems to a lack of budgeting, down from one in five (20 percent) just two years earlier.

 

The average age of a new client was 40, down from 41 in 2017, and two thirds of clients were under 40, compared to just over half (51 percent) in 2014. The majority of clients were in work, and 82 percent rented their home.

 

The proportion of new clients in arrears on at least one priority household bill at the time they sought advice was 39 percent, while the most common arrears were on council tax, with rent and utility bills also featuring highly.

 

The most common form of debt among clients was once again credit card debt, with 68 percent having this type of borrowing at the time they sought advice, followed by overdrafts and personal loans.

 

There was a small rise in the number of people struggling with debts relating to high-cost, short-term credit, primarily among the charity’s younger clients.

 

More than a quarter (26 percent) of new female clients and over a third (35 percent) of new male clients aged under 25 have debt to high-cost, short-term credit providers. The incidence was much lower in older age groups – just three percent of clients aged 60 or over, and 10 percent of those aged 40-59.

 

StepChange chief executive Phil Andrew said: “While a huge amount has been done to support people in problem debt and reform credit markets, our client insight shows that there’s still much more for government, policy makers and creditors to consider. While debt can strike at any age, on average our clients are getting younger. It’s important that policymakers work to help turn the tide and prevent debt becoming an inevitable rite of passage for young adults.”

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