Rising Costs Pushing More Scots into Problem Debt

Rising costs across the economy are pushing more and more Scots into problem debt situations, according to a new piece of research.

The debt help charity StepChange has said that the cost of living crisis is now the leading reason why its clients across Scotland have been reaching out for advice and guidance in recent weeks.

According to the organisation, cost of living pressures were the leading cause of debt for 23 per cent of its new clients in Scotland during the fourth quarter of 2022.

That figure is significantly higher than the corresponding number for the first quarter of last year, when only 10 per cent of people cited price rises and cost of living pressures as their primary financial problem.

Notably, StepChange has said that among its new clients in Scotland, energy debt recently overtook council tax debt as the most common type of arrears.

Indeed, between the first and fourth quarters of 2022, the proportion of StepChange clients in Scotland with electricity debt increased from just over a quarter to well over a third (36 per cent).

With the Bank of England’s base rate of interest having increased recently, expert advisors have also seen an uptick in the number of homeowners who find themselves needing advice on their personal debt problems.

StepChange has said that both the Scottish and UK governments need to focus more attention on helping low-income households cope with the financial pressures they’re increasingly under as the cost of living continues to rise.

“We are seeing incredibly high client volumes at the moment, and while a seasonal upturn in demand for debt advice is normal in the new year, such high demand may be an indicator that people’s ability to keep up with the huge price rises we saw last year is waning,” explained Sharon Bell, head of StepChange Scotland.

“We’re urging the Scottish government to work alongside public bodies to take a measured approach towards debt enforcement, reducing harmful practices that push people into further financial difficulty,” she added.

If you live anywhere in Scotland and you are worried about your personal debt situation then Scotland Debt Solutions can help. Contact us directly to arrange a FREE consultation.