02 Jun 2023 | Posted In Money advice news

Money Advice Trust’s new Counting the costs and Shrinking margins briefings shine a spotlight on the impact the cost of living crisis is having on callers to its National Debtline and Business Debtline advice services.

Based on findings from Money Advice Trust client surveys, these briefings outline the challenges that callers face as the cost of essentials rises and household budgets are unable to keep up.

Falling behind on essential costs

Falling behind on essentials was a common theme amongst the people surveyed. A quarter (25%) of National Debtline and one in five (19%) of Business Debtline callers had fallen behind on their energy bills.

Keeping up with council tax bills and buying food and groceries was also becoming increasingly difficult for many of the clients surveyed. In both cases, the proportion of clients who had fallen behind on payments for these had increased compared to the same time last year.

For Business Debtline clients, the situation is made more acute by competing business costs. Since 2019, the average amount of debt owed amongst callers to Business Debtline has risen 43% to £37,434. And as most of Business Debtline clients run their businesses from home, falling behind on energy bills not only impacts household budgets, but in many cases, also the viability of running their business.

Mounting pressure on households and small business finances

More than half (57%) of Business Debtline clients and two thirds (66%) of National Debtline clients surveyed had gone without essential items like food, toiletries or clothing because they could not afford them.

A third (32%) of National Debtline and Business Debtline (31%) clients surveyed reported using credit to cover essentials like energy or council tax. More than half (57%) of National Debtline clients have between one and five debts, and 14% have more than 10 competing debts.

For Business Debtline clients, the overlap in personal and business finances is common – with implications for managing cash flow and budgets. The average amount owed in personal overdraft payments alone amongst Business Debtline clients has increased by 22% since last year.

A difficult time ahead

More than three quarters (79%) of National Debtline clients surveyed said they were worried about being able to pay for essentials going forward due to rising costs. Two thirds of National Debtline and more than half (56%) of Business Debtline clients were worried about affording their energy costs in the coming months.

National Debtline advisers are hearing from people with increasingly complex cases. Two in five clients (41%) have not enough coming in to cover essentials (or a ‘deficit budget’), the average shortfall per month is on the increase, making everyday costs exceptionally hard and paying off existing debts more challenging. Taking into account an increased reliance on credit, and there are clear implications for debt difficulties further down the line.

The situation is similar for Business Debtline clients, but with one key difference – these clients are often also dealing with competing business debts with personal and business finances often overlapping. More than a quarter (27%) of Business Debtline clients are now grappling with more than 10 debts – and with many yet to see their businesses recover from the pandemic, the road to recovery is far from straightforward.


The major enhancements to our National Debtline and Business Debtline services, which are now well underway, will go some way in helping. This includes Business Debtline acting as the UK’s only Centre of Excellence for small business debts, providing online resources for money advisers across the sector through a new AdviserHub launching soon, as well as training through the Wiseradviser service. A National Debtline partnership with Citizens Advice and Mental Health UK’s Money and Mental Health, which provides telephone casework for clients who need additional support, has also been launched.

The cost of living crisis has brought the importance of access to debt advice services like these into sharp focus. Money Advice Trust will continue to do all it can to improve the way it helps the people who contact them for help, as well as working with partners to support people and small businesses through this crisis. There is much more that still needs to be done, including ensuring a range of safe routes out of debt, an area it will continue to focus on in the coming months.

Please leave a comment

Your email address will not be published. Required fields are marked *