UK Households Confront 'New Normal' of Mounting Debt on Essential Bills
UK households have been issued a stark warning that high levels of debt on essential bills have become the "new normal" for many, particularly those on low incomes. Charity StepChange has revealed alarming data showing that arrears on housing and energy costs are escalating, painting a grim picture of financial strain across the nation.
Sharp Increases in Rent and Mortgage Arrears
According to StepChange's latest figures, average rent arrears have surged by 15%, reaching £2,372. Meanwhile, average mortgage arrears have grown even more dramatically, increasing by 22% from £10,239 in 2024 to £12,534 in 2025. These rises highlight the deepening crisis in household finances as essential costs continue to outpace incomes.
Energy Debt Remains a Significant Burden
While the proportion of StepChange clients in debt to energy companies has decreased slightly from 40% in 2024 to over a third currently, the average debt amount has climbed by £220 to £2,560. This indicates that although fewer households are falling behind, those who do are accumulating larger debts, exacerbating their financial vulnerabilities.
Charity Calls for Urgent Policy Interventions
Vikki Brownridge, chief executive at StepChange, emphasized the severity of the situation. "The reality is that rising essential bills and with that rising arrears types across housing, energy, and consumer credit debt, have become the new normal for many households," she stated. "The cost of everyday essentials remains prohibitively high for many households, and our client data has reflected this pressure for several years. Rising household arrears show little sign of slowing down."
To address this crisis, StepChange is advocating for the introduction of national social tariffs for energy and water. Brownridge argues that such measures would "bring costs back down to a level that is affordable for those with low incomes or high needs," providing much-needed relief to struggling families.
Breaking the Stigma Around Debt
Brownridge also highlighted the widespread nature of problem debt, noting that "one in two UK adults has experienced problem debt at some point." Despite its prevalence, debt remains a taboo subject, often leaving affected individuals feeling isolated or embarrassed. "This silence can leave those affected feeling isolated or embarrassed," she explained.
During Debt Awareness Week, StepChange aims to foster open conversations about debt, reassuring people that "it's nothing to be ashamed of. It doesn't define you, and, most importantly, support is available." Brownridge added that common causes of problem debt include ordinary life events like divorce, redundancy, or illness, which can disrupt finances unexpectedly. "It's often not about overspending or mismanaging money; it's about life happening," she said.
With 33 years of experience providing free, impartial debt advice, StepChange stresses that reducing stigma is crucial to encouraging more people to seek help. "When we reduce the shame and silence around it, we remove a major barrier that stops people from seeking the help they deserve," Brownridge concluded.
