INSIGHTS ¦ StepChange Statistics Yearbook

StepChange

Summary

The StepChange Statistics Yearbook 2023 provides an insightful overview of the current state of personal debt in the UK, documenting the challenges faced by individuals seeking debt advice. The report highlights the significant impact of the cost of living increase on debt levels and explores the changing demographic and financial characteristics of new clients who sought advice in 2023.

Key Points

  1. A total of 183,403 new clients completed their first full debt advice session in 2023.
  2. The cost of living increase is now the primary reason for debt, cited by one in four clients.
  3. One in three clients has a negative budget, indicating expenditures surpass income.
  4. Average unsecured debt among clients rose by 8% to £14,654 from the previous year.
  5. Credit cards remain the most common type of debt.
  6. Significant proportions of clients (42%) with energy bills are in arrears.
  7. The demographic most represented among new clients includes women, single parents, and younger adults.
  8. Employment among clients increased, with 59% employed, including 42% in full-time roles.
  9. Homeownership among clients seeking advice rose to 18%.
  10. The proportion of clients with vulnerabilities remained consistent at 55%, with mental health issues prevalent.
  11. StepChange continues to see a high proportion of clients in receipt of Universal Credit (37%).
  12. The methodology for collecting data has been refined to provide a more accurate reflection of client experiences at the start of their debt advice journey.

Key Statistics

  • 183,403 new clients received debt advice in 2023.
  • 25% of clients cited cost of living as the main reason for debt.
  • The average unsecured debt per client is £14,654.
  • 63% of new clients are women.
  • 37% of clients are in receipt of Universal Credit.
  • 18% of clients receiving advice are homeowners.
  • The average amount of credit card debt per client increased by 8% to £6,898.
See also  [INSIGHTS]: FG22 5 Non Handbook Guidance on Consumer Duty

Key Take Aways

  • The escalating cost of living is a dominant factor driving people into debt.
  • Women and younger demographics continue to be disproportionately affected by debt issues.
  • The increasing complexity of clients’ financial situations reflects broader economic pressures.
  • Despite rising incomes, increasing expenditures, largely driven by inflation, are pushing more into negative budgets.
  • Homeownership among clients indicates that debt issues are affecting a broader cross-section of society.
  • StepChange’s ongoing adaptation of methodologies ensures more accurate and timely support for those in financial distress.
  • The significant role of credit cards in personal debt underscores the need for better financial management education and resources.
  • The consistency of vulnerabilities among clients highlights the need for tailored advice that considers mental health and other personal factors.
  • The persistence of high debt levels despite economic recovery efforts signals a need for broader systemic changes to alleviate financial stress.

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