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Debt restricting people’s life chances

8 Awst 2016

High levels of debt make people less likely to move house, apply for a new job or start a business, according to major new research which exposes the ways excessive debt damages life chances.

The landmark study by Citizens Advice - which helps more than 350,000 people a year with debt problems - highlights how arrears are holding people back and calls on the new Government to put tackling unmanageable personal debt front and centre of its social mobility strategy.

Following the Bank of England’s decision on Thursday to cut interest rates to a record low of 0.25%, Citizens Advice is also calling on creditors to pass on the cut and take the pressure of people in debt.

Citizens Advice finds that 4.3 million people (9%) have debts equivalent of three months or more of their income (on average £6,500) and that:

  • Just under half (45%) say their debt makes them less likely to start a business - compared to 33% of the general population.

  • 41% say their debt makes them less likely to study or retrain - compared to 27% of the general population.

  • Just under a third (28%) say their debt makes them less likely to change jobs - compared to 19% of the general population.

  • More than a third of people (34%) say their debt makes them less likely to move to a new town or city, compared to 27% of the general population.

The major new report from Citizens Advice finds that young people (aged 25-34) with high debt are a fifth (19%) more likely than older people (aged 45-54) with debt to say they would not study or retrain.  

It also shows private renters are nearly twice as likely as those with a mortgage to have excessive debt. The study also finds that twice as many young people (aged 20-29) have unmanageable debt compared to 30-39 year olds.

Gillian Guy, Chief Executive of Citizens Advice, said:

“Helping people escape unmanageable debt is crucial to a fair economy.

“Being able to borrow money helps people make significant investments in their lives - such as getting on the housing ladder or going to university. But when debt becomes excessive it can hold people back from taking calculated risks such as starting a business or training for a new career.

“The new Prime Minister has rightly pledged to improve life chances for all - at the centre of this effort must be a commitment to support people get free from unmanageable debt so they can get on in life.”

The new Citizens Advice report comes a month after the Bank of England reported the fastest growth in lending since 2005 - with consumer credit growing by £1.8 billion.

Notes to editors

  1. Citizens Advice commissioned YouGov to carry out research on the impact of unmanageable debt on people’s behaviour. The sample size for the poll was 2,109 adults, with 1,526 answering questions on debt and life choices. Fieldwork was undertaken between 27 and 30 November 2015. The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+).
  2. Figures on unsecured debt growth taken from Bank of England, (2016) Statistical Release: Money and Credit
  3. Average earnings calculated on latest ONS earning and working hours statistics.
  4. The Citizens Advice service comprises a network of local Citizens Advice, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
  5. The advice provided by the Citizens Advice service is free, independent, confidential and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
  6. To get advice online or find your local Citizens Advice in England and Wales, visit
  7. You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers.
  8. Local Citizens Advice in England and Wales advised 2.5 million clients on 6.2 million problems in 2014/15. For full service statistics see our publication Advice trends.
  9. Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 2,500 service outlets across England and Wales.