Statistics Yearbook: Some Insights from 2023

By Asiya Uddin, Research and Insight Officer

Today, we’re launching our latest Statistics Yearbook, which provides insight into the demographic and debt situations of clients who fully completed their very first debt advice session between January and December 2023.

In the ever-evolving landscape of personal finance, understanding the trends and challenges faced by clients seeking debt advice is crucial. The Statistics Yearbook sheds light on key insights into the financial circumstances of its clients. Here, I’ve delved further into my three key takeaways from the report that highlight the financial realities many clients are grappling with when reaching out for support with their problem debt.

1) One new client completes debt advice every three minutes

In the Yearbook, we highlighted that StepChange advised 183,403 new clients in 2023, marking a notable 10% increase compared to 2022. The increase of clients seeking debt advice underscores the ongoing need for support with problem debt, with the equivalent of one new client completing debt advice every three minutes (172 seconds).

Moreover, early indications from our monthly client data reports also reveal that the number of clients coming to us for debt advice in the first two months of 2024 is already two percent higher than the first two months of 2023. So far, each month of 2024 had higher client volumes when compared to its respective months in 2023.

We will continue to monitor the number of clients coming to StepChange for debt advice in 2024 through our monthly client data reports.

2) Mounting cost of living pressures

For several years, ‘a lack of control over finances’ was the leading reason for people contacting the charity for help with their problem debt. 2023 marked a pivotal shift, being the first year where ‘a cost of living increase’ was the number one reason for debt among clients.

One in four (25%) clients cited ‘a cost of living increase’ as their main reason for debt in 2023, which is unsurprising considering that households have had to navigate high inflation rates. This reason for debt is up by seven percentage points compared to 2022 (18%), and by 19 percentage points compared to 2021 (6%).

Another potential indicator of clients struggling with cost of living pressures is whether they have a negative budget [1]. The proportion of clients with a negative budget increased by two percentage points from 30% in 2022 to 32% in 2023. During the same time period, the proportion of clients in receipt of Universal Credit also increased, by three percentage points (2022=34%), to almost two in five (37%) clients in 2023.

3) Majority of clients are in employment

In 2023, three in five (59%) StepChange clients were in some form of employment, which is up by three percentage points compared to 2022 (56%). The proportion of clients in full-time (42%) and part-time (15%) employment increased by two percentage points and one percentage point, respectively since 2022.

And looking ahead to 2024, our monthly client data reports shows a continuation of this trend. The proportion of clients in full-time employment was 43% in each of the first two months of 2024. The continual uptick in the proportion of full-time employed clients seeking debt advice is concerning as it signals that their employment isn’t enough to provide them with resilience to prevent them from experiencing financial difficulty.

We intend to delve deeper into this worrying trend, our forthcoming report aims to explore what is driving the increase in full-time employed clients seeking debt advice from the charity. We plan to release our report, ‘In work. But still in debt’ next month.

StepChange’s Statistics Yearbook 2023 provides valuable insights into the financial landscape of individuals seeking debt advice. From growing client numbers to evolving budget challenges, the report underscores the complex realities faced by clients whilst dealing with problem debt.

If you can’t wait another year for insights on our debt advice clients, our most recent monthly client data reports and other research reports are available to view here.

[1] A negative budget describes a situation where a client’s monthly expenditure is greater than their monthly income after proceeding through StepChange’s advice and budgeting process.