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Opinion

Four million Brits struggle with problem debt. Now's the time for the next government to step up

Looking ahead to the general election, any new government must commit to tackling financial vulnerability once and for all

debt

The next government must commit to tackling debt. Image: Pexels

It’s hard to believe it’s only been five years since the last general election. For all the unexpected events that have happened, from the pandemic to the war in Ukraine, and the cost of living crisis, each has had a unique and, in most cases, difficult impact on people’s finances.

As the UK’s leading charity helping people struggling with problem debt, StepChange Debt Charity has learnt to adapt quickly to emerging crises, ensuring that through all the chaos, people have access to free and impartial support when they need it. However, while people may assume the worst is over, for many, particularly those on the lowest incomes in our society – financial difficulties persist and in some cases are worsening. Last year we supported one person with full debt advice every three minutes – marking a 10% rise on the previous year.

Now, looking ahead to the next general election and the formation of a new government with a new mandate, we are calling on all political parties to commit to tackling financial vulnerability once and for all, as four million people across the UK struggle with problem debt.

Being in debt can be an isolating and difficult experience that can bring with it feelings of stigma and shame. People often bury their head in the sand and are unaware of the support available to them, while feeling unable to talk about or even acknowledge the situation they are in is common.

Following a dip in people seeking help with their debts during the pandemic due to government support packages helping to prevent widespread financial difficulties, the number of people seeking our help has risen sharply since 2022 as the cost of living crisis has taken hold. Last year, we saw our clients’ average unsecured debt levels reach their highest level for 10 years, while the average amount of arrears across household bills also rose.

As living costs continue to climb sharply, people’s ability to create a rainy-day savings pot has dwindled – let alone repay debts. Our recent research found that over half of all UK adults (53%) would be unable to cover an unexpected cost of £1,000 within one month without turning to borrowing. And all of this is before we turn to the rise of what we term ‘negative budgets’ – a third of all our clients are in this situation, where their income is not enough to pay for essential bills and costs, even after going through a detailed budget and full debt advice. While we are proud to have helped 50 people a day become debt free last year, the truth is that there are only so many tools available to us and we need the next government to step up.

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As interest rates, rent and mortgages, and inflation all remain high, factor in stagnating wages and benefit inadequacy, the likelihood is our service numbers will rise in the coming years. People often speak of a “debt timebomb”, waiting to explode, but the truth is, that for so many of our clients, it’s more like quicksand. Once you are caught in it, it can be very difficult to get out and is often drawn out over a long period. It can be years until people use all the financial coping mechanisms available to them and they reach crisis point. That is why we need to see all parties’ manifestos commit to ending problem debt and supporting the most financially vulnerable.

As you may be able to tell and will likely already know from reading the Big Issue, there is no quick fix to the complex issue that is problem debt. It cuts across a range of policy areas and government departments. That’s why whoever comes to power following the next election must pull every lever at their disposal to reduce financial insecurity.

Our asks are clear: a private rented sector which better supports tenants in financial difficulty, a statutory regulator for bailiffs, a sustainable future for debt advice, and a cross-governmental approach to address financial insecurity. People have regularly spoken of us emerging out of the pandemic to a “1945 moment”, one in which the political consensus can be reshaped. Our asks would go a long way to starting the journey to this moment.

Vikki Brownridge is the CEO of StepChange.

Do you have a story to tell or opinions to share about this? We want to hear from you. Get in touch and tell us more.

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