Debt charities report a surge in calls in January as financial worries intensify
Charities report an 'unprecedented' rise in debt-related inquiries post-Christmas
Kevin Peachey, Cost of Living Correspondent
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Debt charities are witnessing a surge in calls as individuals grapple with mounting financial concerns, fearing their financial situation is spiraling out of control. The initial weeks of January typically witness a surge in helpline activity following a period of heightened expenses.
StepChange, an advice charity, reported Monday as its busiest day, surpassing any single day from the previous year. Money Wellness, a credit counseling service, noted that a fifth of its clients accessing services at the start of the year did so during late-night hours. Dave Murphy, who is working towards debt resolution, acknowledges the potential overwhelming nature of creditor demands, urging those in distress to seek assistance for their financial and mental well-being.
Money Wellness, offering free debt and money advice, reported thousands of individuals accessing its services on Christmas Eve and Christmas Day. The organization's expanded online assistance enables people to find information outside regular hours, including overnight. Sebrina McCullough, the head of advice, highlighted the unprecedented numbers during the Christmas and New Year period, attributing it to the pressure of holiday celebrations, even amidst financial constraints.
StepChange's website witnessed a significant influx of visitors on Christmas Day (3,958), New Year's Eve (15,401), and January 1st (15,401). While some may have been exploring options, the call volume at the month's start was notably higher than the previous year, though not reaching the levels of the energy crisis a few years ago. The Money Advice Trust, managing National Debtline, reported more calls during the first working days of January compared to the previous year, with Monday being the busiest day in its history, receiving 1,365 calls.
Concerns are particularly heightened for those struggling with priority bills like council tax and rent. The cold weather may exacerbate the situation for vulnerable households, with £4.4 billion owed to energy suppliers post-high-price period, although the government's cold weather payments have been activated in many areas.
Charities urge individuals with unmanageable debt to seek help promptly, avoiding further complications by ignoring the issue. This sentiment resonates with Dave, who successfully navigated his financial challenges. A few years ago, he encountered difficulties with previously manageable credit card debt when facing redundancy and divorce simultaneously, resulting in a debt peak of £20,000 to £25,000.
'It was overwhelming,' Dave shared, recalling his experience. 'You feel you're letting creditors down, but fear and financial strain make daily life challenging. Once in a spiral, it's hard to escape.'
Now employed in insurance, with manageable and repaying debts, Dave aims to assist others, emphasizing, 'You can overcome these challenges.'
Figures from the Bank of England earlier in the week fueled concerns about the increasing difficulty for households in managing everyday costs without resorting to borrowing. Data revealed that credit card borrowing grew at the fastest annual rate in nearly two years leading up to Christmas, with the annual growth rate reaching 12.1% in November, up from 10.9% the previous month, marking the highest figure since January 2024 (12.5%).
