6.7 million individuals in Britain struggle with financial difficulties, according to a recent report by Debt Justice
The report shows households’ economic strain as more people struggle to keep up with mounting expenses.
Financial crisis, even among younger generations
The Guardian reported that the survey conducted by Debt Justice revealed alarming statistics, with 13% of adults admitting to missing three or more credit or bill payments over the past six months.
This figure rocketed to 29% among 18- to 24-year-olds, highlighting the critical financial difficulties younger demographics face. Even among 25- to 34-year-olds, a quarter reported similar difficulties.
The findings are further supported by a surge in requests for assistance with problem debts, as observed by various charities.
Growing need for support from charities
Crosslight Advice, a charity offering debt and money advice in London and the south-east, reported a notable 20% increase in inquiries during the first two months of 2024 compared to last year.
This surge reflects a growing demand from individuals struggling to meet their financial obligations.
Official figures released by the Insolvency Service emphasise the severity of the situation, with 10,136 individuals entering insolvencies in February alone, a 23% increase from the previous year.
These insolvencies included bankruptcies, individual voluntary arrangements (IVAs), and debt relief orders (DROs). DROs are primarily for those with relatively lower debt levels.
What is the government’s plan for this?
In response to the escalating crisis, the government has announced measures to relieve those burdened by debt.
The Chancellor’s recent budget included removing the £90 charge for a DRO, slated to take effect on April 6, to make debt relief more accessible.
Debt Justice has called upon all political parties to prioritise support for individuals struggling with unmanageable debt, supporting measures that afford them a fresh start and protection against the harassment of debt collectors.
The organisation’s “Together Against Debt” manifesto, launched as Debt Awareness Week kicks off, proposes a range of initiatives to safeguard consumers, including introducing a legal duty of care for local authorities and government departments in pursuit of debt collection.
The escalating cost of living crisis has worsened the situation, with rents and mortgages rising, causing immense strain on household budgets. Nearly half of those seeking assistance from charities like Crosslight Advice have been forced to cut back or forgo essentials like food due to financial pressures.
