A new report from Citizens Advice warns that household debt is becoming a major barrier to improving living standards, with growing numbers of people struggling to meet the cost of essentials and unable to repay what they owe.
Published on 15 October 2026, Out of the Red: Tackling Debt to Turn the Tide on Living Standards highlights the scale of the problem facing households across the UK. According to the charity, more than 48,000 people each month have sought debt advice so far this year, while average debt levels among those seeking support have exceeded £10,000 for the first time. Over half (51%) of debt clients are now operating with a negative budget, meaning their income is insufficient to cover essential living costs.
The report identifies a significant shift in the nature of household debt, with arrears on essential bills such as energy, water and council tax becoming increasingly common. Citizens Advice argues that many households are no longer falling into debt because of short-term financial shocks or excessive borrowing, but because they simply cannot afford everyday essentials.
The charity warns that debt is no longer just a symptom of financial hardship but an active obstacle to recovery. Unaffordable repayment demands, collection practices, and the impact of debt on employment, health and housing can prevent households from benefiting from wage increases or additional financial support.
With an estimated 8.7 million UK households currently in debt, the report calls on government to make debt reduction a core part of its living standards agenda. Recommendations include stronger protections against unaffordable repayments, more accessible routes out of unsustainable debt, and greater integration between debt advice, health, housing and employment support services.
For MALG Members, the findings reinforce concerns about the growing prevalence of arrears linked to essential household bills and the increasing need for joined-up approaches that combine early intervention, effective data sharing and practical support for financially vulnerable customers.