The cost of living crisis is morphing into a household debt crisis. As we run out of will/levers to tackle the former, we need to start preparing for the latter, now.
It was around the Summer of 2021 when we started spotting something odd in our data about household debt.
People coming to an organisation like Citizens Advice having not paid the bills is nothing new. And there has long been an over simplified divide that has plagued policy debates about debt — is this primarily a problem of ‘can’t pays’ or ‘won’t pays’? Is it about poor budgeting and personal responsibility or inadequate income?
Then around Summer 2021 we saw a spike in the number of people in what we call ‘negative budgets’. This is when someone’s income doesn’t meet their essential outgoings — the emphasis here is on ‘essential’, not what people would like to be able to spend in a perfect world. The number of debt advice clients in a negative budget held steady-ish around 36–38% for a few years. Then it jumped to 41%. And it kept going up and up — to 51% today, with no sign of stopping.
Read the full report at – https://wearecitizensadvice.org.uk/a-debt-time-bomb-is-about-to-go-off-why-arent-we-doing-anything-about-it-bb2dbecf9b7e
