Almost 13 million adults in the UK are now struggling to pay bills or are heavily burdened by debt, according to new analysis from the charity Debt Justice. The figure has risen by two-thirds since 2017, when 7.7 million adults were classified as over-indebted.
The charity's findings come as the Bank of England raised interest rates to 5% last month, the highest level in 15 years, with financial markets predicting further increases to as much as 6.25% by the end of the year. Debt Justice warns that the cost of living crisis and rising interest rates risk trapping people in poverty.
Heidi Chow, executive director of Debt Justice, said: 'The government is turning a blind eye to the colossal household debt crisis that is engulfing millions of people at breakneck speed. Instead of ignoring the problem, they need to raise incomes, boost protections for people in arrears and write off unpayable debts.'
The Financial Conduct Authority's tracking survey found that the number of people struggling with debt rose from 9.6 million in May 2022 to 12.8 million in January this year. Debt Justice says there is insufficient support for those in debt during the cost of living crisis.
One 47-year-old community worker from east London described how her debt spiralled to £15,000 after health problems and reduced income. She said: 'I took out credit cards and loans. I tried everything possible to pay off the debt. I was put in an impossible situation.'
Debt Justice is calling for a new government strategy, including a freeze on evictions and bailiff action to enforce household bills. The charity warns that without action, many will remain trapped in poverty, acting as a drag on the economy for years to come.
