London Daily

Focus on the big picture.
Friday, Nov 28, 2025

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
UK Chancellor Reeves Defends Tax Rises as Essential to Reduce Child Poverty and Stabilise Public Finances
No Evidence Found for Claim That UK Schools Are Shifting to Teaching American English
European Powers Urge Israel to Halt West Bank Settler Violence Amid Surge in Attacks
"I Would Have Given Her a Kidney": She Lent Bezos’s Ex-Wife $1,000 — and Received Millions in Return
European States Approve First-ever Military-Grade Surveillance Network via ESA
UK to Slash Key Pension Tax Perk, Targeting High Earners Under New Budget
UK Government Announces £150 Annual Cut to Household Energy Bills Through Levy Reforms
UK Court Hears Challenge to Ban on Palestine Action as Critics Decry Heavy-Handed Measures
Investors Rush Into UK Gilts and Sterling After Budget Eases Fiscal Concerns
UK to Raise Online Betting Taxes by £1.1 Billion Under New Budget — Firms Warn of Fallout
Lamine Yamal? The ‘Heir to Messi’ Lost to Barcelona — and the Kingdom Is in a Frenzy
Warner Music Group Drops Suit Against Suno, Launches Licensed AI-Music Deal
HP to Cut up to 6,000 Jobs Globally as It Ramps Up AI Integration
MediaWorld Sold iPad Air for €15 — Then Asked Customers to Return Them or Pay More
UK Prime Minister Sir Keir Starmer Promises ‘Full-Time’ Education for All Children as School Attendance Slips
UK Extends Sugar Tax to Sweetened Milkshakes and Lattes in 2028 Health Push
UK Government Backs £49 Billion Plan for Heathrow Third Runway and Expansion
UK Gambling Firms Report £1bn Surge in Annual Profits as Pressure Mounts for Higher Betting Taxes
UK Shares Advance Ahead of Budget as Financials and Consumer Staples Lead Gains
Domino’s UK CEO Andrew Rennie Steps Down Amid Strategic Reset
UK Economy Stalls as Reeves Faces First Budget Test
UK Economy’s Weak Start Adds Pressure on Prime Minister Starmer
UK Government Acknowledges Billionaire Exodus Amid Tax Rise Concerns
UK Budget 2025: Markets Brace as Chancellor Faces Fiscal Tightrope
UK Unveils Strategic Plan to Secure Critical Mineral Supply Chains
UK Taskforce Calls for Radical Reset of Nuclear Regulation to Cut Costs and Accelerate Build
UK Government Launches Consultation on Major Overhaul of Settlement Rules
Google Struggles to Meet AI Demand as Infrastructure, Energy and Supply-Chain Gaps Deepen
Car Parts Leader Warns Europe Faces Heavy Job Losses in ‘Darwinian’ Auto Shake-Out
Arsenal Move Six Points Clear After Eze’s Historic Hat-Trick in Derby Rout
Wealthy New Yorkers Weigh Second Homes as the ‘Mamdani Effect’ Ripples Through Luxury Markets
Families Accuse OpenAI of Enabling ‘AI-Driven Delusions’ After Multiple Suicides
UK Unveils Critical-Minerals Strategy to Break China Supply-Chain Grip
Taylor Swift’s “The Fate of Ophelia” Extends U.K. No. 1 Run to Five Weeks
UK VPN Sign-Ups Surge by Over 1,400 % as Age-Verification Law Takes Effect
Former MEP Nathan Gill Jailed for Over Ten Years After Taking Pro-Russia Bribes
Majority of UK Entrepreneurs Regard Government as ‘Anti-Business’, Survey Shows
UK’s Starmer and US President Trump Align as Geneva Talks Probe Ukraine Peace Plan
UK Prime Minister Signals Former Prince Andrew Should Testify to US Epstein Inquiry
Royal Navy Deploys HMS Severn to Shadow Russian Corvette and Tanker Off UK Coast
China’s Wedding Boom: Nightclubs, Mountains and a Demographic Reset
Fugees Founding Member Pras Michel Sentenced to 14 Years in High-Profile US Foreign Influence Case
WhatsApp’s Unexpected Rise Reshapes American Messaging Habits
United States: Judge Dressed Up as Elvis During Hearings – and Was Forced to Resign
Johnson Blasts ‘Incoherent’ Covid Inquiry Findings Amid Report’s Harsh Critique of His Government
Lord Rothermere Secures £500 Million Deal to Acquire Telegraph Titles
Maduro Tightens Security Measures as U.S. Strike Threat Intensifies
U.S. Envoys Deliver Ultimatum to Ukraine: Sign Peace Deal by Thursday or Risk Losing American Support
Zelenskyy Signals Progress Toward Ending the War: ‘One of the Hardest Moments in History’ (end of his business model?)
U.S. Issues Alert Declaring Venezuelan Airspace a Hazard Due to Escalating Security Conditions
×