1.6m people have experienced coerced debt

New research by StepChange Debt Charity reveals around 3% of UK adults, equivalent to 1.6 million people, have experienced coerced debt, a form of economic abuse where the perpetrator coerces a victim into debt, for example by making them take out credit against their wishes. This comes as the charity estimates that around one in eight (12%) of its debt advice clients are impacted by it.

The charity is calling for the government to establish a taskforce to ensure victim-survivors can achieve economic justice through economic safety and stability without having to pay the price for an abuser’s behaviour.

Currently, victim-survivors face years repaying coerced debt, extending the impact of abuse and tying victims to a perpetrator. Often victim-survivors struggle to make ends meet due to debt repayments, experience financial exclusion due to negative impacts on their credit report and, in some cases, are barred from working in certain jobs.

One of the StepChange clients interviewed as part of the research, Liz, shared that the economic abuse perpetrated by her ex-husband negatively impacted her credit file and finances for 11 ½ years after the relationship ended. She wasn’t able to get a mortgage or buy a car on hire purchase, having to turn to her family instead. She also worried she would miss out on a position to which she was appointed as it was subject to a successful credit check. As a result she had to disclose the abuse she had been through and how this led to debts and subsequent credit file impacts, which was retraumatising.  Discussing her experience, she said: “It seems to leech into every aspect of your life and the roads you can take are so different to everyone else’s.”

National YouGov polling commissioned by StepChange for the report reveals low public awareness of coerced debt and economic abuse, making it less likely victims will recognise abuse and access support. Yet the figures show how widespread the issue is among UK adults with almost seven in ten (68%) people have never heard of the term coerced debt.
An estimated 1.6 million people have experienced coerced debt at the hands of a current or former partner, family member or friend in the last 12 months. Whilst the majority of people (58%) who had experienced coerced debt had not sought advice or support.

The research uncovers inconsistencies in the quality and level of support for people experiencing coerced debt. Key problems identified are a lack of specialist knowledge and compassion. Debt write off is crucial for victim-survivors with coerced debt wherever possible and has vital benefits yet remains rare, in part due to barriers to separating joint debts.

StepChange is joining organisations such as Surviving Economic Abuse, Refuge and UK Finance in calling for a cross-government economic abuse taskforce to lead change and overcome cross-cutting legislative and regulatory barriers to ensure victim-survivors can achieve economic justice.

Vikki Brownridge, CEO at StepChange Debt Charity, said “Those who have experienced coerced debt should not pay the price for their abuser’s behaviour. Yet restoring a victim-survivor’s finances can be a long and complex process, particularly in the case of joint debts and joint mortgages. The challenge of dealing with debts that have been coerced is compounded by the emotional and mental health impacts of abuse.

“Our research highlights the urgent need for government leadership and a collaborative approach from regulators, financial services and advice agencies in supporting victim-survivors to regain financial control and ensure they do not spend years paying back coerced debts. A more consistent approach to debt-write off and credit file restoration are two key recommendations that would help to achieve this.”

Sam Smethers, Interim CEO at Surviving Economic Abuse, said “StepChange’s report paints a stark picture of how widespread and devastating coerced debt is. We hear time and time again that abusers are leaving victim-survivors drowning in debt, making it impossible for them to rebuild their lives and provide for their children. Often survivors are forced to rely on foodbanks to feed their families and many are left with destroyed credit ratings for years to come.

“Victim-survivors should not have to pay for abusers’ crimes. We want to see their debts cleared and their credit ratings restored. That’s why we alongside StepChange are urging the government to set up a cross-government task force on economic abuse to agree on solutions to coerced debt and credit restoration. It’s the only way to help survivors and their children escape and safely rebuild their lives.”