Negative budgets data

The rising problem of negative budgets

More than half of the people we help with debt advice are in a negative budget - nearly twice as high as in 2019.

Someone is in a negative budget when their income is not enough to cover their essential costs, even after being helped by one of our advisers.

They’re building up debt just to get by, with no way of repaying what they already owe. Like quicksand, it’s hard to get out of once you’re in. 

Use the filter in the chart below to see which groups, among the people we help, are most at risk of being in a negative budget.

PIP helps keep disabled people out of the red

Among our debt clients, disabled people with the Personal Independence Payment (PIP) are 10% less likely to be in a negative budget than disabled people without PIP.

This shows the value of PIP in lifting disabled people out of a negative budget and why delays in disabled people getting PIP need to be fixed.

People are deeper in the red each month

We can work out the average monthly surplus of the people we help with debt advice.

This is how much money they've got left (or how deep they are in the red) after paying for essential costs.

Some groups are particularly deep in the red - including single parents, private renters, disabled people, ethnic minorities, the self-employed and, more recently, mortgage holders.

Use the filter bar to see the trends for different demographic groups.

High energy and housing costs are driving people into the red

In the chart below we look at the monthly essential spending of all the people we've helped with debt advice.

You can see that monthly spending on essentials such as private rent, mortgages, energy costs and groceries has increased significantly in the last two years.

5 million people are in a negative budget

This doesn't just affect the people we help.

Now, for the first time, we've used the unique data we get from the people we help at Citizens Advice to estimate how many people across the country are trapped in a negative budget. 

In 2023-4, 5 million people are in a negative budget, including 1.5 million children - this has increased by 54% since 2020-1.

A further 2.35 million are living on empty, only avoiding a negative budget by cutting back their spending to unsafe levels.

Fixing the problem of millions in negative budgets, and millions more living on empty, should be the first priority of any government. Our data insights can show the scale of this problem and the policies that are best at fixing it.

You can read more in our report, The National Red Index: how to turn the tide on falling living standards.