For people living with unmanageable debt the effects are rarely confined to the financial.
Debt is emotional, practical and social. It affects sleep, relationships, work, health and self-worth. And too often, shame and stigma keep people from reaching out for help with their debts, until their options have narrowed and the pressure has become overwhelming.
Debt stigma thrives by making a solvable problem seem like an insurmountable private failing. It tells people that debt is evidence of irresponsibility, but in the majority of the cases we see the opposite is true.
Take Maria, whose newborn’s complex health needs meant she and her husband had to spend weeks living out of a hotel so they could be by their baby’s side in hospital.
Lost earnings and extra costs for accommodation, food and travel to medical appointments meant they suddenly had to rely on various forms of credit to make ends meet.
Although Maria had spent her working life in financial support and had referred others for advice, she felt embarrassed about needing help herself. She did not reach out to us until her debts were in the tens of thousands.
Far from poor decision-making or reckless spending, it is life shocks like these – ill health, insecure work, relationship breakdown and bereavement – that are among the most commonly cited reasons for debt among our clients.
A pandemic and a cost-of-living crisis that has lasted half a decade now have supercharged the cost of everyday essentials, outstripping wage growth and eroding the financial headroom of millions of households.
Last year, three in five of our clients were in some form of employment and 44 per cent were working full-time. From the thousands of clients we help every year, we know that debt is not confined to people outside work, nor to a narrow stereotype of “bad budgeting”. Rather, it is woven into ordinary households’ attempts to keep up with essentials.
We also know there is a large and persistent gap between the number of people who need debt advice and the number who receive it. The Money and Pensions Service (MaPS) has found that 14 per cent of UK adults – around 7.3 million people – need debt advice.
A further 22 per cent – or 11.7 million people – were at risk, meaning they were struggling to afford bills or credit commitments and pay for essentials, or relying on credit to get by. That means more than one in three adults either needs debt advice now or is close enough to the edge that early help could prevent problems escalating.
Yet the debt advice sector is only reaching a fraction of that group – around two million people.
This gap is not a small operational problem; it is a national financial wellbeing challenge, at the heart of which sits the stigma that stops people reaching out for help. On average, half of StepChange clients wait more than a year between falling into difficulty and reaching out, with embarrassment or shame prevalent among the reasons for delay.
This matters because debt rarely stands still. Arrears accumulate, fees and interest can grow, collection activity intensifies and people may make short-term decisions such as using borrowing to repay borrowing – that deepen the problem.
The stigma is reinforced when the wider environment makes people fear the consequences of reaching out for help. If someone believes contacting a lender will automatically damage their credit file, lead to harsher treatment or mark them out as a risk, they may avoid the conversation. If they think debt advice is only for people in crisis, or only for people on very low incomes, they may not recognise that support is meant for them.
These kinds of perceptions act as barriers. The earlier someone speaks up, the more options they may have.
Reducing debt stigma cannot be left to debt advice charities alone. We can offer free, impartial, high-quality support, but stigma often bites elsewhere: when a customer opens a collections letter, hears automated language on a phone line, logs into a banking app, speaks to an employer about payroll pressure, reads government guidance or sees public commentary about “personal responsibility”. This can either increase shame or make help feel normal, practical and worth seeking.
Banks, lenders, utilities, insurers and debt collection agencies are often the first organisations to see signs of financial difficulty. Key to bridging the gap between financial difficulty and the right support are communications that are clear, fair and empathetic; staff who are trained to respond without judgement; support options that are easy to find before arrears become severe; and swift referrals to free debt advice where appropriate.
A stigma reducing approach is therefore central to preventing harm and driving good outcomes for consumers.
Government also has a crucial role. Public policy shapes both the drivers of debt and the experience of its collection. Council tax, benefit deductions, housing costs, utilities bills can all become routes into arrears. Where collection practices are punitive or difficult to navigate, they can compound stress and discourage engagement.
Reducing stigma means making public-sector debt collection the same as responsible creditors: affordability, early intervention, plain language, early signposting to support. It means investing in advice capacity so that campaigns encouraging people to seek support do not simply create longer queues and, ultimately, discourage people from seeking help.
Employers can normalise conversations about financial wellbeing without prying into personal circumstances. Media coverage can challenge stereotypes rather than amplify them.
Community organisations, health services, schools and local networks can help make debt advice visible as everyday support, not a last resort.
If people cannot talk about financial difficulty in the places where they spend their lives, many will continue to carry the burden alone. The goal is simple: make the first step towards help feel ordinary. That means replacing blame with realism. Millions of people need debt advice. Millions more are at risk.
Debt advice works, but it works best when people use it early enough for the fullest range of options to remain open. Reducing stigma is not just a communications exercise. It is a test of financial resilience, consumer protection and social inclusion.
If every lender, public body, employer and community voice treats debt as a problem to solve – rather than a weakness to hide – more people will ask for help sooner. That could mean fewer sleepless nights, fewer crises and more households finding a way forward before debt does its worst damage.
Emma Thomas, director of government and public affairs at Experian, said: “As a proud member of the Treasury’s Financial Inclusion Committee, Experian and StepChange have worked closely with policymakers to help shape a financial inclusion strategy that puts consumers’ needs first and ensures people can access the right support when they need it.
“We’re committed to consumers, using our data and technology to support organisations like StepChange in tackling debt stigma, to help drive meaningful change, and unlock financial freedom for millions of people.
“As part of this change, we encourage the Labour government to focus on how data legislative framework can be amended to more effectively support the challenges faced by those in debt and financial exclusion, such as the reform of the Open Banking framework in the UK, [and] to create a more workable system that supports consumers to share in a controlled and trusted environment.”
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