London Daily

Focus on the big picture.
Friday, Sep 11, 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
John Lewis Partnership Loss Widens to £124 Million
UK Government to Put White Working-Class Social Mobility at Centre of Equality Policy
McLaren Plans £450 Million Technology Investment Creating 1,000 UK Jobs
UK Chancellor Faces Calls for Wealth Taxes and Public Ownership in Autumn Budget
English Mayors to Gain Powers to Impose Uncapped Overnight Tourist Taxes
JPMorgan’s Jamie Dimon Warns UK Government Against Bank Windfall Taxes
UK Air Traffic Control Outage Cancels More Than 2,000 Flights
UK Imposes Trade Ban on Israeli Settlements in the West Bank
UK Borrowing Costs Surge as Middle East Tensions Push Long-Term Gilt Yields to Highest Since 1998
Buckingham Palace Says Prince Harry and Meghan Will Not Resume Official Royal Duties
UK Treasury Faces Calls to Scrap £100,000 Childcare Support Threshold
Trades Union Congress Urges Labour Government to Rewrite Migration Policy
Riot Police Deployed After Anti-Migrant Protests Turn Violent in Portsmouth
UK Considers Replacing Some Disability Cash Payments With Direct Services
JPMorgan’s Jamie Dimon Warns UK Chancellor Against Higher Banking Taxes
UK Announces New Sanctions Targeting Israeli Settlements in West Bank
Metropolitan Police Investigate Alleged Illegal Donations to Reform UK
UK Charges Wiltshire Man With Assisting Russian Intelligence
UK Orders Urgent Review After Air Traffic Failure Cancels More Than 2,000 Flights
Merz Rebukes AfD Expansion in Saxony-Anhalt
King Charles Confirms Prince Harry and Meghan Will Remain Private Citizens
Labour Selects Former Child Refugee for By-Election in Keir Starmer’s Former Seat
Foreign Private Equity Accelerates Takeovers of London-Listed Industrial Companies
NHS Maternity Care Faces Scrutiny Over Support for Mothers After Caesarean Births
BBC Warns Staff Strikes Are Likely Amid Job Cuts and Programme Cancellations
English Housing Affordability Improves to Best Level in More Than a Decade
UK Health Commission Proposes Framework for Wider AI Adoption Across NHS
Labour Faces Pressure for Wealth Tax Ahead of Autumn Budget
Metropolitan Police Open Criminal Investigation Into Alleged Foreign Donations to Reform UK
UK Police Deploy Riot Officers After Anti-Immigration Unrest in Portsmouth and Dover
UK Defends Sanctions on Israeli Settlements Despite Diplomatic Retaliation
UK Air Traffic Control Failure Cancels More Than 1,000 Flights and Disrupts 65,000 Passengers
Compass Urges £10 Million Wealth Tax and Public Ownership Ahead of UK Autumn Budget
UK Government’s Devolution Plans Face House of Lords Scrutiny
Maldives Seeks New Chagos Sovereignty Talks With UK Prime Minister Andy Burnham
UK Airports Face Continuing Disruption After National Air Traffic Control Failure
UK Bans Imports From Israeli Settlements and Expands Sanctions on Iran
British Chambers of Commerce Forecasts UK Growth of 1% as Investment Remains Weak
UK Suspends Local Government Reorganisation Decisions and Cancels Planned Shadow Authority Polls
UK Parliament Opens Inquiry Into Gaps in Climate Change Preparedness
Andy Burnham and Xi Jinping Hold Talks on Trade, Security and British Consular Cases
UK Joins France, Canada and Other Nations in Measures Against Israeli West Bank Settlements
UK Announces New Sanctions Targeting Iranian Nuclear and Military Networks
British Chambers of Commerce Calls for Business Rate Reform and Productivity Support
UK Farmers Warn Dry Summer Could Reduce Crop Yields and Push Up Food Prices
UK Rail Networks Hit by Widespread Delays After Major Signalling Failures
Matt Clifford Resigns as ARIA Chair After Conflict-of-Interest Scrutiny
UK and France Say Joint Border Operations Have Prevented More Than 48,000 Irregular Channel Crossings
UK Core Inflation Remains Above Expectations as Utility and Commodity Costs Stay Elevated
Jaguar Land Rover Considers Up to 4,000 UK Job Cuts Amid Automotive Industry Pressure
×