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Debt triggered by divorce and redundancy, finds charity

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Debt problems tend to appear at significant life events such as divorce or redundancy finds debt charity StepChange.

Debt problems are particularly acute for certain groups, such as tenants and single-parent families. 80% of clients contacting the charity in 2017 were tenants, though only a third of UK households rent. At the same time 21.5% of new clients were single parents with children, though this only represents 6% of UK households.

There has been a notable increase over recent years in the proportion of young people seeking debt advice, with around one in seven seeking debt advice from the charity under 25, and nearly two thirds under 40. This was seen in the increasing popularity of the group’s online debt service.

Debt appears to be a growing problem, with 619,946 new clients contacting the charity for debt advice last year – 3.5% more than in 2016, and 22% more than four years ago. The highest concentrations of people in difficulty are in the North East and London. One in five seeking help has an ‘additional vulnerability’ such as a physical or mental health condition.

Around 40% of new clients are in arrears on at least one of their top household bills, of which council tax is the most common. Credit card debt remains the most common form of debt.

Phil Andrew, chief executive of StepChange, said: “It can be too easy to look at statistics and fail to see the anxious human face of problem debt. But it is both striking and shocking that last year around one in every 100 UK adults contacted StepChange Debt Charity alone for debt advice.

“Our clients show that the debt problem is far from solved. With the prospect of higher interest rates ahead, it would be a mistake to take too much reassurance from the gradual improvement in the wider economy. Debt charities help clients to pick up the pieces when things have gone wrong. But it’s vital that the government, regulators and those in the industry do everything they can to head off problems from occurring in the first place.”

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