London Daily

Focus on the big picture.
Sunday, Oct 18, 2026

Families face debt squeeze as prices keep rising

Families face debt squeeze as prices keep rising

A resurgence in cases of people unable to cover their debt repayments is expected, a charity has warned, as the cost of living hits family budgets.

Debt advisers are urging people who are struggling with existing debts to come to fresh arrangements on how much to repay each month.

Doing so made the basics affordable again, one dad told the BBC.

Prices are rising at the fastest rate for 30 years, creating fresh strain on people's finances.


'Dramatic increases'


Many thousands of people are on debt management plans (DMPs), often when they owe money to a host of companies which they cannot afford to repay under the original agreement.

Creditors are offered a lower, but regular, payment which is made each month. This is designed to fend off the likelihood of a default and, in return, lenders tend to freeze interest or any further charges.


Prices, as measured by inflation, are currently rising at a rapid rate - the fastest since 1992. This means some people who were previously keeping to their DMP repayments are now finding it a lot more difficult. Rising domestic gas and electricity bills, and accelerating price rises, are likely to add to the strain.

Sue Anderson, from debt charity StepChange, which negotiates DMPs, said: "Through the Covid pandemic we saw an increase in the number of clients who were temporarily unable to continue to meet their planned payments on managed debt solutions, and now it looks as if we are going to see a resurgence of this as a result of dramatic increases in the cost of living."

Among the charity's clients, nearly twice as many said in March that the rising cost of living was a key reason for getting into debt compared with six months earlier.

It was the third most likely reason given, behind a lack of control over finances and unemployment or redundancy.

Andy is on a repayment plan and is urging others to seek help


When Andy Barwell spoke to BBC News in December, the father-of-two said urged others to learn from his example that you cannot "live a champagne life on a lemonade budget".

Debts had taken him to the brink, but he had got his life back on track. Now, six months later, he said even he needed to act as energy bills and rent had become more expensive.

"Everything just seems to be a bit tighter now. For now, all treats have had to stop, not that there was many before.

"I have contacted [Stepchange] and amended my repayments to something more affordable. Granted, this means my debt will take longer to pay off but at least I can still afford the basics and also know that my debts are being paid too, and that no interest or added costs are piling back up on top."


'Get help early'


Sara Williams, who writes the Debt Camel blog - which has covered this issue, said that signs of difficulty needed to be addressed early.

She said the prospect of further price rises meant that anyone finding it hard now should ask how they would get through the next three months or more.

Among the tell-tale signs, she said, was when people reached for a credit card as the only way to pay for fuel in the car.

"If you are struggling now, then ask for a reduction, but be realistic," she said.

She added that creditors would not want requests to be commonplace, and borrowers could always increase repayments when the situation improved.

Newsletter

Related Articles

0:00
0:00
Close
Competition and Markets Authority Launches Formal Inquiry Into Corporate Artificial Intelligence Partnerships
Automotive Industry Leaders Urge Westminster to Accelerate Electric Vehicle Charging Infrastructure Rollout
Home Office Expands Digital Border Security Framework With Mandatory Electronic Travel Authorizations Across United Kingdom
Northern Ireland Executive Reaches Final Consensus on Public Sector Pay Reform and Budget Allocations
Welsh First Minister Secures Additional Funding for Rural Agricultural Transition and Sustainable Farming Schemes
Scottish Government Unveils Accelerated Regional Infrastructure Strategy to Boost Clean Energy Manufacturing
National Health Service England Launches Emergency Recruitment Drive to Alleviate Severe Acute Care Winter Backlogs
Bank of England Monetary Policy Committee Signals Cautious Approach to Interest Rate Reductions Amid Persistent Wage Growth
British Government Finalizes Emergency Energy Support Package to Protect Households From Winter Price Surges
Russell Brand Trial Begins at Southwark Crown Court
UK Parliament to Debate Climate Risks and Council Tax Following Public Petitions
Department for Transport Demands Safety Audits Following Regional Rail Disruptions
House of Lords Scrutinizes Amendments to Armed Forces Bill
Devolved Administrations in Scotland and Wales Criticize Post-Brexit Funding Framework
Prime Minister Andy Burnham Defends Middle East Military Support Under Parliamentary Scrutiny
NHS Leaders Warn of Severe Pressure on Hospitals from Winter Virus Outbreaks
Retailers and Business Groups Lobby Chancellor for Relief from Rising Employment Taxes
City of London Taskforce Urges Radical Reform to Prevent UK From Becoming "Incubator Nation"
Bank of England Officials Signal Potential November Interest Rate Hike
Institute for Fiscal Studies Warns of £35 Billion Funding Gap in Upcoming Autumn Budget
IMF Upgrades UK Growth Forecast to 1.3% for 2026
Former UUP leader Jeffrey Donaldson sentenced to 15 years in prison for historical child sex offences
UK ministers adopt independent commission blueprint to fast-track AI in the NHS
Labour leadership orders local councillors to end power-sharing deals with Green Party
UK government considers regulatory intervention in proposed Sky and ITV merger
Environment Agency declares severe drought across six English regions as reservoirs hit critical lows
NHS England issues new guidance prohibiting transgender women from female-only wards
Norwegian teenager sentenced to 20 years for part of Iran-backed assassination plot in Britain
UK government threatens complete visa ban on Eritrea over refusal to accept deportees
UK Treasury lobbies UBS to move global headquarters to London amid banking sector tax threats
MI5 Warns of Growing Russian Sabotage and Espionage Threats Across Britain
UK Prime Minister Andy Burnham Plans Brussels Talks to Renegotiate Post-Brexit Trade Deal
MI5 Warns of Rising Russian and Iranian Sabotage Threats to British Military Facilities
UK Prime Minister Andy Burnham Pledges Closer EU Ties as MI5 Reveals Russian Brexit Interference
UK Orders Security Review Following Reported Killing of Former Politician Ann Widdecombe
UK Prime Minister Andy Burnham Meets German Chancellor Merz to Strengthen European Security Ties
Nearly 100,000 NHS Patients Treated in Hospital Corridors as England Braces for Winter Pressures
UK Government Rejects US-Russia Diesel Agreement and Reaffirms Sanctions Against Moscow
UK and Germany Agree to Deepen Security and Economic Cooperation Following Berlin Talks
British Prime Minister Burnham Pledges Closer EU Ties During Visit to Germany
UK Announces New Sanctions on 17 Russia-Linked Entities During Foreign Secretary's Ukraine Visit
UK and Germany Finalize Kensington Treaty to Strengthen Defense and Technology Cooperation
Britain Maintains Diplomatic Mission in East Jerusalem Despite Israeli Closure Deadline
English Councils Push Government to Rethink Proposed Funding Cuts
Scottish Homebuilding Falls to Lowest Level in 11 Years
BBC Chief Matt Brittin Defends Restructuring as Staff Challenge Job Cuts
UK Finance Warns High Energy Costs and Bond Yields Are Complicating Fiscal Outlook
UK Adopts All 44 Recommendations on Regulating AI in Healthcare
Chancellor John Healey Prepares Autumn Budget as Borrowing Costs Strain Public Finances
UK Investigators See Strong Indications of Iranian Link After RAF Fairford Security Operation
×