January is one of the hardest months for debt – but it’s never too late to seek help

While we know that debt happens all year around, Christmas and New Year do tend to bring financial difficulty into sharper focus for many people. On Christmas Day alone, almost 4,000 people across the UK visited StepChange’s website looking for help with their debt. Every January at StepChange we prepare ourselves for an influx of people in need of debt advice and this year is no different.

It’s not uncommon for people to put off getting help with their debts for a long time. Factors including stigma, a reluctance to talk about money and being unaware of the help available can cause people to struggle alone for several months or even years after their problems begin. So it’s not surprising that a new year and perhaps the financial strain of Christmas and winter encourages people to seek support in January.

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We also know that a new year has not erased the problems of the last. This January brings a rise in household energy bills and the same housing pressures of inflated rent and mortgage costs that dominated last year. In fact, our new polling reveals only one in five (20%) people believe their household financial situation will get better over the next 12 months. All of these external factors have huge implications for people dealing with debt, making it harder to repay what they owe, and harder to build savings to prevent the same financial difficulties from reoccurring

This will be the first full calendar year of the new government, and we’re hopeful that 2025 brings some much-needed respite for people dealing with financial stresses – but it will take action from policymakers to bring about meaningful change.

In the first six months of the new government, we saw some positive steps in preventing debt problems for financially vulnerable households. This included an extension of the household support fund, which is distributed through local authorities to provide essential funds for people struggling to make ends meet. The government also announced changes to universal credit debt deductions, meaning that the amount that the DWP can deduct from benefit payments to repay debts was reduced – a decision that will make a real and tangible difference for those on the lowest incomes.

Shortly before Christmas, Ofgem announced plans to address the over £3bn worth of household energy debt that has built up over the energy bill crisis, something which we, along with others in the sector, had long been calling for. Yet energy costs remain volatile, we’ve seen a rise in the price cap this month, with further rises expected later this year. This is not sustainable for people with little room in their budget for unexpected costs, and we need to see government thinking long term about how to protect low income households from high energy costs.

Of course, the biggest elephant in the room is the cost of housing, for both private renters and mortgage holders alike. The Renters’ Rights Bill (RRB), currently making its way through parliament, is going to bring about vital protections and stability for private renters by ending section 21 evictions – a long overdue piece of legislation. Yet affordability of housing is not necessarily addressed in the bill and the burden of these costs are pushing many people into the red. These issues must be considered if people are to have a chance at building back some financial resilience this year.

If the past few years has taught us anything, it’s that we can’t really predict the impact that global events will have on our personal finances at the outset of a new year. What we can say as a charity who has helped people with debt problems for 32 years, is that if you are at all worried about debt – you’re not alone and you don’t have to deal with it alone. Alongside ourselves, there are several free and impartial organisations there to support people dealing with unmanageable debt – our service is available online 24/7, with expertly trained, non-judgemental advisors on hand to support.

Vikki Brownridge is CEO of StepChange.

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