Debt awareness week starts on 23rd March. Started by the debt charity StepChange in 2014, the week is all about encouraging us to get early advice for problem debt.
Debt can take on many forms. Credit card debt, bank overdrafts, payday loans, hire purchase. The list goes on. In fact, according to The Money Charity, the total household debt in the UK in 2019 was a brutal £1,669 BILLION. Their full report on UK debt can be read here.
Debt and (Even deeper) Debt
But not all debt is equal, and the focus of StepChange’s debt awareness week is ‘problem debt’. So, what is problem debt? Problem debt is when we become unable to pay our existing debts or other household bills. It’s when the debt keeps growing and we can’t chip away at it. Or when we take out one loan to pay off another, or get a new credit card to pay off our last one.
The Money Advice Service estimates there are over eight million of us in the UK with problem debt. But the percentage of people in problem debt who also claim Universal Credit is much higher. According to StepChange’s research, twenty-five percent of Universal Credit claimants are in ‘severe problem debt’.
The problems really begin to mount up when we can’t pay our utility bills or rent. But there is help out there. Debt Awareness week is all about making that first step towards getting our debt in order. StepChange can help us make our own Debt Management Plan, which can reduce our monthly payments and decrease our interest rates.
Eve, a young Mum from Cheshire used the service when her debts spiralled out of control: “StepChange helped me pay off a lot of debt that I had accumulated over the years. Every advisor I spoke to was so kind and helpful!”
There are other things we can do, too. There are Debt Relief Orders, Individual Voluntary Arrangements and all sorts of advice we can get to change our spending, saving and earning habits. Sorting our debts out is the first step to taking back control of our money. Debt Awareness Week is the perfect time to start that process.