StepChange: Millions behind on essential bills

3 Million people across UK are in arrears

As many as three million people across the UK are in arrears on at least one essential bill according to a report from StepChange Debt Charity.

In 2017, 140,000 people who received debt advice from the charity were behind on essential household bills, such as an energy bill, council tax, mortgage or rent – equivalent to two in five of the clients it advised.

Among renters, for example, those without rent arrears had significantly higher levels of borrowing relative to their income – 77 percent – than those renters with rent arrears, around 55 percent.

According to the findings, an estimated 9.3 million people used credit to meet a household need in 2017 – with 1.4 million of those using high cost credit.

Groups identified as being at higher risk of arrears on priority expenditure included lower income families, renters, people with an additional vulnerability, and younger people.

The most common arrears were on council tax, which made up around 30 percent of cases, followed by water bills at 23.7 percent, rent, with 21.5 percent and mortgages at 20.6 percent.

StepChange said its average client spends around 60 percent of their net monthly household income on essential household bills plus food, while among those on the lowest net household incomes – those under £10,000 – an average 93% of their monthly income is swallowed up by the basics.

Peter Tutton, head of policy at StepChange Debt Charity, said: “The government must ensure that the right kind of debt support framework is in place – especially in the design of the new debt breathing space scheme, but also in the way that deductions from benefits are applied. At the moment, these can have perverse consequences.

“Policymakers should make it a priority to increase households’ financial resilience through helping them to build savings, to help more people cope with the ‘new normal’ of insecure income and regular income shocks.

“Finally, there is a huge opportunity for utilities providers, local authorities, landlords and other creditors to reflect on how they can create more flexible and personalised payment schedules for people whose incomes fluctuate. For example, higher payments in some months and lower payments in others could help people to work around foreseeable financial pinch points in the year –and potentially help them to keep up their agreed payments.”


  • Michelle Kerwin
  • consumer lending, consumer loans, Finance, StepChange

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