4 million Britons in perpetual debt - Charity: Spending on basic needs exceeds income
Four million people in England and Wales live in households mired in a negative budget, meaning they spend more on basic needs than they earn, according to the charity Citizens Advice.
At a time when food, energy and housing bills are rising, the organisation said that in addition to the millions of people already in debt, another 580,000 are in a critical situation, with just £50 left at the end of the month. According to the institution, those who have to repay existing debts are being pushed further into crisis, as the cost of living is exceeding their incomes.
The figures are based on analysis of spending data from the Office for National Statistics and information collected from the charity's own clients. Citizens Advice noted that private sector renters and single parents are particularly at risk from the cost of living crisis.
Citizens Advice said that in the 2024-25 financial year, the average deficit for households with a negative budget was £343, but for 2025-26 it is expected to increase to £396. More than half of the people the organisation helps with debt are in a negative budget. Their average household debt is £9,963.
This month, energy bills for a typical household have risen to £1,755 a year, while food inflation has started to rise again. Figures for August show food prices have risen by 5.1% compared to a year earlier. Official data published over the summer showed that rents are taking up an increasingly large share of renters’ incomes.
The charity is calling on the government to take action in the autumn budget to help those facing hardship. It is calling for targeted support for utility bills, increased rent assistance and the elimination of the policy that allows benefits for only two children per family.
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