Debt charity, StepChange has revealed thousands are struggling with problem debt in Scotland. Drawing on client data from January to December 2017 titled Scotland in the Red the report reveals that:

  • Record numbers are contacting StepChange for help in Scotland; nearly 20,000 people sought debt help in 2017. Those seeking help have seen a real-terms decrease in their average monthly incomes and increasing numbers of clients were in debt due to falling behind on essential bills. The average amount of money clients have left over after meeting housing costs, paying to heat their homes and paying Council Tax is now just £15.
  • 2 in 5 clients liable for Council Tax were in arrears in 2017, and the average amount of Council Tax arrears has increased drastically by 45% since 2013.

The research also identifies that more of those seeking help now live in rented accommodation compared to 2013. Since then, the percentage of clients with mortgages has decreased from 39% to 24% with 61% of clients now living in rented accommodation. Furthermore, greater numbers of young people were seeking help with debt, the percentage of StepChange clients aged 25-39 has increased by 6% since 2013, with 46% of clients now aged under 40.

Sharon Bell, Head of StepChange Debt Charity Scotland, said “Over 60% of the people we help are in debt due to circumstances they could not have prevented or planned for. The rises in Council Tax, electricity, rent and mortgage arrears highlight how difficult day-to-day living has become for many Scottish for many households. Keeping a roof over your head and heating your home is basic needs, yet for too many Scottish families these are constant worries. Even where families are not in debt, many are balanced on a knife edge, one setback away from problem debt.”

“Our latest research offers a vital insight into the scale of the problem in Scotland. Budgets are being squeezed by stagnating incomes rising households bills. Our clients have to commit more of their money just to cover basic living costs.”

James Dornan, MSP for Cathcart who has previously led debates on debt and StepChange Debt Charity in Holyrood said “The Scotland in the Red Report is another example of the excellent work that StepChange does, not only in the quality of research they produce, but also in the fantastic service they offer their clients. The report demonstrates the pressures that many households are facing. Scotland is leading the way in seeking to support those with debt. Scotland has the only statutory debt arrangement scheme in the UK, with breathing space that freezes interest rates and charges to allow a manageable and sensible debt repayment schedule.”

Key findings:

  • Nearly 20,000 people contacted us last year, an increase of 47% since 2013
  • The average monthly  incomes of Scottish clients have increased by only £60 – 5% over 5 years from £1,193 to £1,253
  • The average monthly budget surplus for clients is down 37%. The average client now has just £15 left after paying their essential bills
  • In some areas clients have no surplus and are in deficit. In 2013, 25% of constituencies had an average budget deficit; that figure had increased in 2017 to 37%, 26 out of 73 constituencies.
  • 41% of clients liable for Council Tax are in arrears. Those arrears have increased by 45% from £1,368 to £1,981
  • Electricity arrears have increased by 37% since 2013 with average arrears up from £543 to £745 in 2017
  • Average Mortgage arrears have increased 35% since 2013, to £3,523 in 2017, although the percentage of clients with a mortgage has shrunk from 39% to 24%
  • Rent arrears have increased by 25% to an average £740, 61% of clients are now living in rented accommodation