The State of Household Debt & Insolvencies in 2025

If you’ve felt like your money just doesn’t go as far as it used to, you’re definitely not alone. From rising bills to higher interest rates, 2025 has been another tough year for household finances across the UK. The cost-of-living crisis may no longer be front-page news every day, but it’s still very much part of people’s everyday reality, and it’s affecting everything from how we shop, save and even plan for the future. In this blog, we’ll take a closer look at what’s happening with household debt & insolvencies in the UK right now – why it’s happening, who’s being affected and what can be done if you’re struggling. Whether you’re just starting to feel the pressure or already deep in it, you’re not alone, and support is available.



While inflation has slowed a little compared to previous years, it hasn’t exactly gone away. Food prices are still high, rent and mortgage payments have jumped, and energy bills, while slightly lower than last year, are still causing stress for many.

The problem is that wages haven’t kept up. Most people are still earning roughly the same while their costs keep rising. That’s pushed a lot of families to lean on credit cards, overdrafts and even buy-now-pay-later schemes just to get by. It’s become a juggling act for many, with less and less room for error.

Unsecured debt – like credit cards, personal loans and payday loans – is growing quickly in 2025. More people are using credit to get by, not for big purchases, but to cover everyday essentials like food, bills and travel. And with interest rates still reasonably high, it’s getting harder to keep up with repayments, let alone clear the balance.

Behind every debt is a real person trying to make ends meet. For many, borrowing has become a way to bridge the gap between paydays. Over time, though, that short-term fix can turn into a long-term struggle. The pressure mounts up, and it can feel like there’s no way out. That’s why more people are now turning to formal debt solutions like IVAs and DROs to get back on track and take some of the load off. Reaching out for help early can make a big difference.


The State of Household Debt & Insolvencies in 2025


Location: United Kingdom

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