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Cost of living driving more households into debt, says charity
Guest Author:
Samantha PartingtonAn increasing number of households say the rising cost of living is the reason they are struggling with debt.
Charity Stepchange said 27 per cent of consumers who have applied for help cite the cost of living as their main reason for being in debt, up from 15 per cent a year ago.
Almost three in five new debt advice applicants are in arrears with their gas and electricity bills, which has increased by three percentage points compared to the previous month.
The number of households seeking debt advice has risen year-on-year for the fourth month in a row.
In April, 14,512 bill payers accessed full debt advice, 15 per cent higher than April 2022 (12,629).
Chief executive of StepChange Vikki Brownridge said: “It’s been a concern for some time that the knock-on effect of high inflation would be unmanageable and long-term problem debt among households.
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“Arrears on household bills continue to grow and while energy bills are set to come down in summer, prices will remain unaffordable for millions of lower income households who are also grappling with increased costs across other utilities, rent and mortgage payments.”
Brownridge added that as food prices remained at record high levels rising and there was an increased likelihood of further interest rate the crisis showed little sign of slowing down.
Food inflation reached 19.1 per cent in the year to April, the second highest rate in 45 years according to the Office for National Statistics.
Stepchange is calling for government funding to write off energy arrears for users who cannot afford to clear their debt and a social tariff for energy to protect households from increasing financial difficulty and fuel poverty.