UK Debt Hits £1.94 Trillion: What the Latest 2026 Figures Mean for You

UK debt crisis update: What the latest figures tell us

As 2026 gets underway, new data from The Money Charity confirms that Britain’s personal debt problem shows no sign of easing. The February 2026 edition of The Money Statistics paints a sobering picture — one that continues to drive demand for debt advice and insolvency solutions.

Debt in the UK: The Numbers Keep Rising

By the end of December 2025, total personal debt in the UK had reached £1.94 trillion — up £63.9 billion compared to December 2024. That works out to an extra £1,141 of debt per UK adult added over the course of just one year.

The average household now carries £67,163 in total debt (including mortgages), while the average debt per adult stands at £34,677 — approximately 90.5% of average annual earnings.

And the interest burden is significant. Based on December 2025 figures, UK borrowers are paying £239 million per day in interest — a total of £87.4 billion over a 12-month period. For the average household, that’s £3,023 in interest payments every year.

Credit card debt: Still climbing

Unsecured borrowing continues to grow at pace. Outstanding credit card debt reached £78.3 billion at the end of December 2025 — an increase of 8.8% in the year, one of the sharpest annual rises in recent memory. The average credit card debt now stands at £2,709 per household and £1,399 per adult.

As with our previous analysis, the true sting lies in the repayment terms. A person making only the minimum monthly repayment on the average credit card balance would take 27 years and 8 months to clear the debt. If that same person fixed their repayment at the first month’s minimum (£77 per month), they’d clear the debt in just under five years — a stark reminder of how small changes in repayment behaviour can make an enormous difference.

Insolvencies rising sharply

Perhaps the most striking figures relate to individual insolvencies. In the three months to January 2026, there were 33,847 individual insolvencies in England and Wales — a 14.2% increase on the same period a year earlier. That equates to 368 people becoming insolvent every single day, or one person every 3 minutes and 55 seconds.

Every day in England and Wales, 21 people were declared bankrupt, 128 Debt Relief Orders were granted, and 219 Individual Voluntary Arrangements (IVAs) were entered into.

In the 12 months to January 2026, 127,473 individuals — 1 in 388 adults in England and Wales — became insolvent.

County Court Judgements (CCJs) are also up. There were 2,747 consumer CCJs issued every day in England and Wales in the final quarter of 2025 — a 9.5% increase on the same period the previous year.

Cost of Living: Slight easing, but pressure remains

There is one piece of genuinely positive news in the February 2026 report. CPI inflation fell to 3.0% in the year to January 2026, down from 3.4% in December 2025 — the lowest rate since March 2025. Food and non-alcoholic beverage inflation also dropped to 3.6%, its lowest since April 2025.

Petrol prices have also fallen. The average price of unleaded petrol dropped to 131.91p per litre in January 2026 — its lowest level since the summer of 2021.

Looking ahead, energy bills are forecast to fall by around £117 per year from April 2026 as the Ofgem price cap reduces. However, it’s worth noting that energy costs remain around £425 per year higher than they were before the energy crisis — meaning household budgets are still under far greater pressure than they were just a few years ago.

More People Seeking Help

Debt advice services continue to see high demand. Citizens Advice Bureaux in England and Wales handled 1,250 debt issues every day in the year to December 2025. StepChange reported 17,998 clients receiving debt advice in January 2026 alone, with “cost of living increases” and “lack of control over finances” among the most common reasons for seeking help.

71% of StepChange’s January clients had credit card debt. The profile of those seeking help is also telling. The majority of StepChange clients in January 2026 were female, under 40, and renting — reflecting the particular pressures facing younger households in the current economic climate.

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 Money Statistics
The Money Statistics – February 2026 PDF