Debt charities report January spike in calls as worries mount.

Debt charities across the UK are reporting an unprecedented surge in calls and online queries this January, as households grapple with the financial aftermath of the festive season compounded by persistent cost of living pressures. The first weeks of the new year traditionally mark the busiest period for helplines, but this year’s demand is described as exceptional, signaling a deepening crisis for many.

Leading advice charity StepChange revealed that a recent Monday was busier than any single day throughout the previous year, highlighting the scale of the emerging challenge. Similarly, credit counselling service Money Wellness noted a significant trend: a fifth of those accessing its services around the turn of the year did so between the late hours of 10 PM and 3 AM, underscoring the acute anxiety and sleepless nights debt can cause.

Kevin Peachey, the BBC’s Cost of Living correspondent, reported on the increasing strain faced by individuals. The festive period often creates immense pressure to spend, even when household budgets are already stretched thin. This expectation, coupled with high inflation and stagnant wages, creates a potent cocktail of financial distress that typically surfaces in January as bills from Christmas spending arrive.

Dave Murphy, a testament to the power of seeking help, shared his journey out of significant debt, urging anyone struggling to reach out for support for both their financial and mental well-being. His story is a powerful reminder that while demands from creditors can feel overwhelming, solutions are available.

Money Wellness, which provides free debt and money advice, recorded thousands of people accessing its online services even on Christmas Eve and Christmas Day. This expanded digital assistance allows individuals to seek information and guidance outside conventional working hours, reflecting a growing reliance on nocturnal research when anxieties are at their peak. Sebrina McCullough, head of advice at Money Wellness, articulated the gravity of the situation: "The numbers we’re seeing over Christmas and New Year are unprecedented. People often feel pressure to celebrate the holidays, even when money is tight, and our data shows many are turning to us late at night when they feel most anxious."

The digital footprint of financial distress extended across various platforms. StepChange’s website, a vital resource for those exploring their options, saw 3,958 visitors on Christmas Day alone, with a combined 15,401 visits on New Year’s Eve and January 1st. While not all visits translate immediately into calls, the subsequent influx of helpline requests confirms the widespread concern. While the call volume has not yet reached the peak levels seen during the energy crisis of a few years ago, the notable increase compared to last year indicates a significant and worrying trend.

The Money Advice Trust, operators of the National Debtline, confirmed that the initial working days of January witnessed a higher volume of calls than in the corresponding period last year. In a stark illustration of the demand, a recent Monday registered as the busiest single day in the charity’s history, with 1,365 calls pouring in. These figures paint a clear picture of a nation under financial strain, with more households than ever seeking urgent guidance.

A primary concern for many callers revolves around priority bills such as council tax and rent. The inability to cover these essential costs can quickly escalate into more severe problems, including eviction or legal action, placing immense stress on individuals and families. The advent of colder weather further exacerbates the situation for vulnerable households, adding extra strain on already precarious budgets. The UK already faces a substantial energy debt, with an estimated £4.4 billion owed to energy suppliers following a period of stubbornly high prices. While the government’s cold weather payments have been triggered in numerous areas, providing some relief, they often represent a temporary reprieve rather than a long-term solution to underlying financial fragility.

Charities are united in their plea for anyone whose debt has become unmanageable to seek help as swiftly as possible. Delaying action can often lead to the situation worsening, potentially accumulating more interest, fees, and further damage to credit ratings. This proactive approach is strongly endorsed by individuals like Dave Murphy, who has successfully navigated his way out of a difficult financial period.

A few years prior, Dave found his previously manageable credit card debt spiralling out of control after a dual blow: unexpected redundancy coincided with the emotional and financial turmoil of a divorce. "They were two quite dramatic things in six months," Dave recounted, having previously shared his struggles with the BBC. "The debt was around £20,000 to £25,000 at its height. It became so overwhelming. You feel that you are letting creditors down because you want to do what they ask of you – but you are scared, you are renting, and at times you struggle to get through each day." His experience highlights the profound emotional toll that debt can take, pushing individuals to the brink. "Once you are in a spiral, it is really hard to get out of it," he added.

Through the support of StepChange, Dave has turned his finances around. He is now gainfully employed in the insurance sector, his debts are manageable, and he is diligently working towards paying them off. His motivation to share his story stems from a desire to help others, "to show that you can get through these things." His journey underscores the critical role debt charities play not just in financial restructuring but in restoring hope and mental well-being.

The latest economic data further fuels these concerns. Figures released earlier in the week by the Bank of England indicated that everyday costs are becoming increasingly difficult for some households to manage without resorting to borrowing. Credit card borrowing, in particular, saw its fastest annual growth rate in nearly two years in the run-up to Christmas. The annual growth rate for credit card borrowing climbed to 12.1% in November, an increase from 10.9% the preceding month. This figure represents the highest rate since January 2024, when it stood at 12.5%, suggesting a trend of increasing reliance on credit to cover daily expenses and festive spending. This elevated borrowing is a red flag for economic stability and individual financial health, indicating that many are struggling to make ends meet amidst persistent inflationary pressures and high interest rates.

Experts warn that this trend is likely to continue into the early part of the year, as the full impact of Christmas spending, increased utility bills due to colder weather, and the general elevated cost of living continue to bite. The psychological impact of debt cannot be overstated; it often leads to stress, anxiety, and depression, creating a vicious cycle where mental health issues can impede effective financial management. Charities are not only providing practical financial advice but also offering crucial emotional support, recognizing the interconnectedness of financial and mental well-being.

For those finding themselves in a similar predicament to Dave, charities advise a few key steps: firstly, acknowledging the problem and not ignoring demands from creditors. Secondly, creating a detailed budget to understand income and outgoings. Thirdly, checking eligibility for any available benefits or grants. Most importantly, reaching out to a free, independent debt advice service like StepChange, Money Wellness, or National Debtline. These organisations can provide tailored advice, help negotiate with creditors, and explore options such as debt management plans, Individual Voluntary Arrangements (IVAs), or Debt Relief Orders (DROs). The message is clear: help is available, and the sooner it is sought, the better the chances of a positive resolution.