The number of people seeking help for debt problems has hit an all-time high, according to new research from a leading debt charity.

Stepchange’s Statistics Mid-Yearbook shows that more than 300,000 people sought advice between January and June this year, the highest half-year number recorded by the charity.

The charity’s chief executive has called on the government to start taking the issue of personal debt seriously.

Those affected by debt problems are increasingly likely to be young, working part-time and living in rented accommodation, the statistics show.

More of Stepchange’s clients are now in work than at any point since 2011 – but increasingly the nature of this work is insecure and part-time, and clients are actually less likely than ever to be in full-time employment.

The number of renters seeking help for debt problems has also risen dramatically in the past five years.

The number of renters seeking help for debt problems has risen dramatically. Image by Paul Maguire/Shutterstock.com

More than three quarters (77%) of Stepchange’s clients live in rented accommodation, up from 55% in 2011.

And the average rent arrears now stands at £954, up from £769 five years ago.

The average age of those approaching Stepchange has fallen in the past five years, with a “steady rise” in the number of under 25s.

59% of the charity’s clients are now under 40, up from 51% just a year ago.

This tallies with the findings of a report by the Money Advice Trust, which said young adults are quickly building up debts despite trying their best to budget – although the trust found that too few were asking for help

Stepchange’s chief executive Mike O’Connor said: “Too many of our fellow citizens are struggling just to make ends meet. 

“Problem debt costs the UK £8.3bn in external costs like additional healthcare spending and lost productivity.

“If we are to help people and their families get back on their feet and contribute to a growing economy, the government needs to take the issue of personal debt seriously.”

Mr O’Connor said the government has promised to review proposals that would see those seeking debt advice given “breathing space” – in which interest charges are frozen and enforcement action stopped – while they get back on their feet. 

“The increasing numbers of people seeking our help shows that people who are struggling need help and the government must now take action which is long overdue.” 

Debts in a digital world

A separate report by Echo Managed Services highlights the growing number of consumers preferring to talk about debts through digital channels.

The Counting the Cost of Debt Recovery report, which surveyed 1,500 consumers, shows that one in four want businesses to contract them via digital means, such as email or text message, in order to settle debts, particularly if they are linked to an online payment portal. 

One in three said they’d respond best to a letter and 40% said they would prefer a phone call. 

Lloyd Birkhead, managing director of Grosvenor Services Group, a subsidiary of Echo Managed Services, said: “The way in which businesses communicate with customers is evolving.

“The rise in popularity of consumers wanting to talk about their debts through digital channels could be attributed to a number of things – the fact that they feel more comfortable avoiding confrontation, perhaps, or simply for convenience in an increasingly digital world. 

“Either way, businesses must adapt. Understanding how to communicate with each individual customer, and putting the control back in their hands by allowing them to select which contact channel they prefer can dramatically increase payment rates, and ultimately lead to reduced instances of debt in the first place.”