UK Personal Debt in 2025: Record Highs, Rising Insolvencies & the Growing Need for Help

As the cost-of-living crisis continues to bite, new figures from The Money Charity reveal the scale of the UK’s growing personal debt burden. For individuals and families already feeling the strain, these numbers paint a stark picture of financial pressure—one that is fuelling a rise in demand for debt help and insolvency solutions.

Debt in the UK: A Nation in the Red

As of March 2025, total personal debt in the UK stood at a staggering £1.89 trillion, an increase of £43.1 billion over the previous year. This breaks down to an average of £34,811 in debt per adult, representing 93.2% of average annual earnings.

While mortgage borrowing makes up the bulk of this figure, unsecured credit continues to climb. The average credit card debt per household reached £2,321, or £1,351 per adult, with the total credit card balance across the UK now sitting at £73.2 billion—up 5.1% compared to March 2024.

These debts are not just numbers—they translate into real financial pressure. The average UK household paid £2,613 in annual interest payments as of March 2025. That’s over £231 million per day being paid in interest alone across the country.

A Slippery Slope: Credit Traps and Long-Term Repayment Struggles

Perhaps even more alarming is how long it would take many people to repay their credit card debts. According to The Money Charity, if someone made only the minimum repayment on the average credit card debt each month, it would take them over 27 years to clear the balance—highlighting how many households are stuck in long-term debt cycles.

With interest rates and essential costs rising, even maintaining these minimum repayments can be a struggle. This creates a vicious cycle where individuals fall deeper into debt just trying to stay afloat.

The Human Cost: Insolvencies and Court Judgements on the Rise

The rise in debt is having visible consequences. In the first quarter of 2025, there were 318 individual insolvencies per day in England and Wales. This represents a 2.1% increase compared to the same period last year.

In addition, County Court Judgements (CCJs)—a sign of creditors taking legal action—are also on the rise. There were 2,516 CCJs issued per day in the first quarter of 2025, with the average judgment being £1,804.

These are not just statistics—they are signs that more people are reaching breaking point with their finances.

Essential Costs Are Fueling the Pressure

What’s driving this debt? It’s not luxury spending—it’s the essentials.

April 2025 saw multiple hikes in day-to-day living costs:

• Energy bills rose by £111 (6.4%) under the Ofgem price cap.
• Water bills went up 26%.
• Council tax increased by between 5–10% in many areas.
• TV licences, broadband and phone bills also rose.

When combined with wage growth that continues to lag behind inflation, these increases make it harder for many households to stay on top of their financial commitments.

More People Seeking Help—But Many Still Struggling Alone

Organisations like Citizens Advice and StepChange are seeing record demand. Citizens Advice dealt with 255,539 debt-related issues in March 2025 alone, and StepChange took on 13,648 new clients, two-thirds of whom had credit card debt.

But despite these rising figures, many people still delay seeking help—often until their situation becomes unmanageable.

Need Help with Debt?

At UK Insolvency Services, we understand how overwhelming problem debt can feel. Whether you’re struggling with credit cards, council tax, or unaffordable loan repayments, there are regulated debt solutions that can help.

The sooner you take action, the more options you may have.

Reach out for free, confidential advice from our expert team today.

Sources:
The Money Charity – April 2025 Money Statistics
The Money Statistics – April 2025 PDF