Unexpected costs leave many households vulnerable

Households experiencing financial difficulties are struggling to build the financial resilience needed to cope with unexpected costs, leaving many vulnerable to being unable to pay for expenses such as car repairs, broken appliances and emergency dental treatment. This is a key finding from research by StepChange Debt Charity supported by PRA Group.

Among the 1,600 StepChange clients surveyed, many said any savings they managed to build were quickly depleted by new expenses, leaving them vulnerable to setbacks.

The research identified healthcare costs as a growing source of financial pressure. Participants cited dental treatment, prescriptions and specialist healthcare as significant contributors to debt, with some delaying care because they could not afford it.

Additional cost-of-living research undertaken by PRA Group found that 29% of customers surveyed would be unable to afford an unexpected £350 expense, while a further 25% said they would need to borrow money to cover the cost.

PRA Group UK Country Operations Director Tim Kirk said “The research highlights the importance of helping people achieve a sustainable financial recovery. That means not only making progress towards resolving their debt, but also building the resilience, confidence and skills needed to cope with unexpected costs and avoid future financial difficulties. The goal isn’t simply to get out of debt. It’s to help people stay out of debt.”

StepChange Debt Charity CEO Vikki Brownridge said, “Financial resilience is a strong indicator of long-term financial wellbeing. The research shows that people are striving for financial security, but we know this can be difficult to achieve. Helping people build the financial buffers needed to withstand future shocks is essential to sustainable recovery.”