High levels of debt on essential bills have become the “new normal” for many low-income households, charity StepChange said on Monday, with average arrears on housing, utilities and council tax rising last year.
People’s budgets have been stretched in recent years as they face higher prices for many goods and services, and the crisis in the Middle East has raised concerns about a new wave of increases.
Figures from the debt charity show its clients were already struggling with mounting arrears. Despite slower growth in mortgage costs and rents in 2025, the debt charity said its clients had fallen further behind on related payments. Average rental arrears increased by 15% to £2,372, while average mortgage arrears grew by 22%, from £10,239 in 2024 to £12,534 in 2025.
StepChange data shows there were a significant number of households behind on their energy bills, even though prices had fallen from the highs of 2022. More than a third of customers were in debt to energy companies, down from 40% in 2024, but the average debt had risen from £220 to £2,560.
Two in five of the clients cared for by the charity during the year received universal credit and three in five lived in rented accommodation.
Vikki Brownridge, chief executive of StepChange, said: “The reality is that rising essential bills, and with it rising rates of housing, energy and consumer credit debt arrears, have become the new normal for many households.
“The cost of essential items remains prohibitively high for many households, and our customer data has reflected this pressure for several years. Households’ growing arrears show little sign of slowing.”
The charity is calling for more action from the government to stop people going into debt just to cover essential costs. He wants to see national social tariffs for energy and water, which Brownridge said would “reduce costs to an affordable level for those on low incomes or high needs.”
