Simon Trevethick, head of communications at StepChange Debt Charity, explained that many different life events could contribute to debt. He said the rising cost of living is only making things tougher.
“Money is still something many of us find difficult to talk about openly, and that discomfort often extends to debt,” Trevethick told the Big Issue.
“There is also a lack of understanding around what drives debt, which can fuel stigma. People often assume if someone’s struggling with debt, they’ve mismanaged their money or overspent – but this is far from the truth.
“For the majority of people we help at StepChange, their debt has escalated due to an unexpected life event throwing their finances off balance, this might be a relationship breakdown, redundancy, period of ill health or bereavement.
“The high cost of living in recent years has made things even tougher, as many people are simply unable to build savings when essentials take up such a large proportion of their income.”
Trevethick explained that debt is much more common than people think, with StepChange’s research finding that more than half (51%) of Brits have experienced problem debt. Almost half of those (44%) told no one they were struggling.
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“It’s true that certain people may be more vulnerable to problem debt, particularly those on lower incomes, women and younger adults. Ultimately in the current climate, many people are being pushed to make difficult financial decisions and meeting the basics of everyday life has become a significant challenge,” he said.
“There is absolutely no shame in struggling with debt, and nobody should feel they have to deal with it alone. Reaching out for help is a positive step, and the sooner someone does that, the sooner they can get their finances, and their peace of mind, back on track.”
Simon Dukes, chief executive of Fair for You, a responsible lender specialising in helping people with poor credit, echoed this.
“Our customers tell us that if you’re in debt, you’ve got bad credit, you’re in receipt of benefits or have low income, you sometimes feel like you’re being looked down on or judged, which can be quite upsetting,” he said.
“People in financial difficulty were often doing everything right and their difficulties were triggered by something completely outside of their control.”
What should I do if I’m in debt?
Experts explain that the most important thing to do if you find yourself in debt, is to not ignore it, but instead to address it with the help of a reputable debt organisation.
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“It’s always best to address the issue before it gets more serious,” said Dukes. “First, speak to your creditors, even if it feels daunting. They may be able to do several things to support, and it’s really in their interests to work with you.”
Dukes said to be wary of adverts surrounding debt that you might see on social media, and if you’re unsure, to go to a trusted resource or charity like StepChange, Turn2us or National Debtline.
“If you’re in debt, you might start seeing adverts on your social media saying things like ‘clear all your debts’, or similar,” Dukes said.
“These promote Individual Voluntary Arrangements (IVAs), and other similar measures like Debt Management Plans (DMPs), Debt Relief Orders (DROs) or bankruptcy. These might be the right option in some circumstances, but it’s important to remember that these companies are also looking to make money. Make sure you fully understand these options if you’re thinking about them.”
Trevethick added that often people try to manage debt repayments by themselves “for a long time before seeking help”, but that getting help early with debt can make a “real difference”.
“Telling your creditors you’re struggling may seem daunting, but it’s an important first step. They will be used to having these conversations and often have specialist support in place to guide you through your options,” he said, adding that StepChange can also provide debt advice sessions.
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“A debt advice session will involve going through your budget in detail, and then you’ll be recommended a path forward to deal with your debts based on your individual circumstances.”
Where can I turn to for help?
There are many charities and organisations you can turn to if you’re struggling with debt – StepChange, National Debtline, PayPlan, Citizens Advice and Debt Advice Foundation are just some of the organisations you can approach – and experts say the sooner you reach out for help, the better.
A debt advisor from any of the organisations above can help you access support for managing debt, like the government’s Breathing Space scheme, which gives temporary protection from creditors while you get advice and make a plan.
They can also create a budget and plan to help manage your debt, or advise you as to whether you might be eligible for a Debt Relief Order, or whether you should declare bankruptcy.
How to avoid debt in the future
Experts say there are a number of steps people can take in order to avoid falling into debt in the future, from claiming all of the benefits they’re entitled to, to boosting their savings.
Experian said building an emergency fund, paying your credit card in full each month, using caution with ‘buy now, pay later’ plans, and creating a budget.
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Trevethick explained that it has been “an incredibly difficult few years for people with the cost of everyday essentials continuing to rise”, but that once someone becomes debt-free and has a little money left over after essentials, there are a few steps to make sure they’re financially protected going forward.
“It’s important to start building up a ‘rainy day’ savings pot, as this can be one of the most effective ways to prevent future debt problems,” he said. “Even if it’s just a small amount each month, an emergency savings buffer can be the thing that stops you from needing to use credit if you’re faced with an unexpected expense.
“It’s also a good idea to keep updating your budget, so you can stay in control of your finances and spot any issues early if your circumstances change.”
He added that a good way to protect your finances is to make sure you’re getting all of the help you’re entitled to – charities including StepChange and Turn2us have benefits calculators you can use to see if there’s any extra money you could be eligible for.
The Big Issue has also compiled a number of resources that could help with the cost-of-living, including what to do if you can’t afford your energy bills, how to apply for universal credit, where to get free financial advice, and how to make your money stretch further.
Do you have a story to tell or opinions to share about this? Get in touch and tell us more.
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