The past four years of economic and social emergency have placed intense strain on the financial stability of UK households. The Covid-19 pandemic brought massive disruption to the jobs market, followed up by explosive inflation and the cost of living crisis. As of Spring 2024, some of the impacts of this crisis are starting to ease, as price rises slow and interest rates begin to stabilise. However, there are signs that the UK’s debt crisis is just beginning. As government support programs have gradually tapered off, the prevalence of problem debt has risen, and advice agencies are now seeing soaring demand across the board.

The purpose of this report is to address the UK’s personal debt crisis in the following respects:

• To put the events of the past four years in their broader macroeconomic context, showing how long-term policy decisions turned the UK into a high-leverage society.
• To address the impacts that the pandemic and the cost of living crisis have had on the financial stability and indebtedness of UK households.
• To explore how future economic turmoil might impact levels of indebtedness and demand for debt advice.
• To review the current policy landscape around debt and insolvency, and to map out what the sector can do to improve resilience and create better customer outcomes in the short and medium-term.