High levels of debt on essential bills have become the "new normal" for many low-income households in the UK, according to a stark warning from the charity StepChange. The organization released data on Monday revealing that average arrears for housing, utilities, and council tax all increased last year, highlighting a persistent financial strain on vulnerable families.
Growing Debt Amid Economic Pressures
People's budgets have been severely stretched in recent years due to rising prices for goods and services. Additionally, concerns over a new wave of increases have emerged from the crisis in the Middle East, further exacerbating financial anxieties. StepChange's figures indicate that its clients are struggling with growing arrears, even as mortgage costs and rents showed slower growth in 2025.
Despite this moderation, the charity reported that clients have fallen increasingly behind on related payments. Average rent arrears climbed by 15% to £2,372, while average mortgage arrears grew by 22%, rising from £10,239 in 2024 to £12,534 in 2025.
Energy Bill Debt on the Rise
StepChange's data shows significant numbers of households are behind with energy bills, even though prices have fallen from the peaks of 2022. Over a third of clients were in debt to energy companies, a decrease from 40% in 2024. However, the average debt has grown by £220, reaching £2,560, indicating that while fewer people are in debt, those who are owe more.
Two in five clients seen by the charity over the year were receiving universal credit, and three in five lived in rented accommodation, underscoring the disproportionate impact on low-income and renting households.
Calls for Government Action
Vikki Brownridge, the chief executive at StepChange, emphasized the severity of the situation. "The reality is that rising essential bills and with that rising arrears types across housing, energy, and consumer credit debt, have become the new normal for many households," she said. "The cost of everyday essentials remains prohibitively high for many households, and our client data has reflected this pressure for several years. Rising household arrears show little sign of slowing down."
The charity is urging the government to take more action to prevent people from falling into debt just to meet essential costs. StepChange advocates for national social tariffs for energy and water, which Brownridge believes would "bring costs back down to a level that is affordable for those with low incomes or high needs."
This call to action comes as households continue to grapple with the lingering effects of economic instability, making debt management a critical issue for policymakers and communities alike.
