Topic overview: debt

• Around one in seven UK adults show strong signs of needing debt advice due to arrears, high‑cost credit use, creditor action and other negative impacts.
• Those who seek debt advice are typically already in significant financial difficulty.
• People who receive debt advice often see improvements in their financial situation, as well as in their financial skills, knowledge and outlook.
• Encouraging earlier access to debt advice requires more entry points before crisis, better visibility of services and clearer information about the benefits of seeking advice.

With 8.4 million UK adults needing debt advice in 2024, and a further 11.4 million at risk, people must be able to access quality, timely advice that matches their needs. Knowing what works in encouraging formal advice-seeking is vital.

Around one in seven UK adults show clear signs of needing debt advice, due to arrears, using high-cost credit, creditor action and other negative impacts.

Those most likely to need debt advice are younger renters with low incomes, often with children, and those with recent mental health problems. London has the highest need, followed by the North East of England and the West Midlands.

A further one in five are at risk: they struggle to keep up with bills and credit commitments, or are running short of money for essentials and using high‑cost credit, though without creditor action. People in this group tend to be older, on higher incomes, in permanent employment, and a mix of tenants and homeowners.

Younger adults may have low and unstable incomes and limited awareness about where to seek debt advice. Advisers regularly support clients with mental health problems, many of whom do not disclose them. Those experiencing coerced debt may also avoid disclosure and face inconsistent support from creditors. Specialist support does not always meet their needs.

During the Covid-19 pandemic, need was greatest for council tax and rent arrears. Black communities, women, disabled people, private renters and younger people were expected to be most affected at that time. The sector responded with new delivery channels, which were maintained post‑pandemic.

Research has identified that the core client needs from debt advice are to:

• improve their financial situation
• enhance their financial skills and knowledge
• foster a more positive outlook with regard to their financial situation.

Effective advice can help by finding the right solutions, increasing income and savings, supporting budgeting and prioritisation, and building confidence and motivation.

Debt advice can improve both financial capability and financial wellbeing. People are more likely to use active debt‑management strategies, reduce spending and feel more in control.

Personal wellbeing also can improve, including reduced anxiety and increased life satisfaction and physical health. Positive mental health effects can happen even after initial conversations.

These outcomes are driven by clear information, emotional support and help dealing with creditors. However, results vary depending on people’s circumstances, including socio‑demographic characteristics, debt severity and how well advice is tailored to their needs.

Barriers remain, including:

• inadequate specialist knowledge and training
• funding constraints
• challenges around disclosure
• inconsistent creditor practices
• difficulties separating joint accounts
• rigidities in credit files. 

While more delivery channels are now available, they are not yet used systematically to address specific barriers faced by different groups.

People who seek formal debt advice tend to already be in significant difficulty, but many more would benefit from help earlier. 

When encouraged to seek advice, people often turn to friends and family. This informal advice can be limited and does not usually address root causes, and can even have a negative impact.

Many people are reluctant to talk to their creditors, and those who do may not receive adequate support. A key challenge is encouraging people who need formal advice to seek it from trusted organisations.

People may also feel overwhelmed, have low financial literacy or confidence, or struggle to give their finances enough attention.

Some misunderstand what debt advice involves, focus on short‑term fixes, or do not know where to turn. Others may mistrust providers or worry they will lose more than they gain.

In some cases, people may not recognise they have a debt problem, or may not see it as a priority compared to other problems they have.

Early contact points are key. Many people are referred into debt advice through trusted organisations such as creditors, utilities, other advice organisations and charities. Strengthening these referral pathways can help reach those who may not recognise their own need.

Debt advice should also be framed around financial wellbeing, with greater visibility, clearer information about the benefits of seeking help and the risks of inaction, and simpler, more flexible journeys that give people more control.

More research is needed to understand how to encourage earlier engagement with debt advice and turn interest into action. Evidence is limited on how referral systems work, where they break down and which approaches are most effective.

Future research should explore which advice models and delivery channels work best for different groups, especially vulnerable and marginalised groups. Better outcome measures and longitudinal studies are needed to assess financial, wellbeing and health impacts, and to understand how far these can be attributed to debt advice.

Key sources informing this overview are:

• Helping those who use credit to make ends meet: A Rapid Literature and Evidence ReviewOpens in a new window - Centre for Business in Society, Coventry University (2022) 
• Motivations and barriers to seeking debt advice - CogCo and Common Collective (2023) 
• Debt advice: Evaluating the long-term outcomes - Money and Pensions Service (2022) 
• MoneyView 2026 - Money and Pensions Service (2026) 
• Debt advice in the post-pandemic landscape - Revealing Reality (2023) 

You can also see:

• our full list of topic overviews, covering a range of themes related to financial wellbeing 
• our financial wellbeing evidence hub, a database of research and evidence.