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10 common reasons why people get into debt in the UK

People get into debt in the UK for many reasons – often due to changes in income, rising living costs, health issues, or unexpected life events.

Understanding the most common reasons people get into debt can help you recognise your own situation and take the first step towards getting support.

Below are 10 of the most common causes of debt in the UK in 2026.

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1. Loss of Income or Unemployment

One of the most common reasons for debt is losing a job or a drop in salary. When income changes suddenly, essential costs like rent, mortgage payments, bills and food don’t stop.

Many people rely on credit cards, overdrafts or loans just to cover basics while they get back on their feet.

2. Rising Cost of Living

The cost of living continues to put pressure on households across the UK in 2026. Higher food prices, energy bills and housing costs can mean even working households struggle.

When income doesn’t stretch far enough, borrowing can feel like the only option.

3. Health Issues and Medical Costs

Health problems can reduce income through time off work and can create extra costs like travel to appointments, prescriptions, or private treatment. Long-term illness or unexpected health issues are a common cause of debt, particularly where savings are limited.

Over time, this financial pressure can lead to missed payments and growing debt.

4. Lending to Friends or Family

Many people fall into debt after lending money to someone they care about. It often starts with good intentions, but if the money isn’t repaid on time (or at all), the lender may end up using credit to cover their own bills.

This can be especially difficult when relationships are involved, as people may feel unable to ask for the money back.

5. Bereavement

Bereavement is emotionally difficult and can create financial strain too. Funeral costs, time away from work, and reduced household income can push people towards credit or loans during an already stressful time.

In some cases, people may also inherit financial responsibilities or joint debts they weren’t prepared for.

6. Separation/Relationship Breakdown

After a relationship ends, finances can change overnight. Going from two incomes to one, covering legal or moving costs, and managing shared debts alone can lead to arrears and financial stress.

Relationship breakdown is a common trigger for debt problems, particularly where joint credit or household bills are involved.

7. Holidays and Lifestyle Spending

For some people, debt builds slowly through holidays or lifestyle spending put on credit cards or Buy Now, Pay Later. It can feel manageable at the time, but repayments and interest can become difficult down the line.

Small amounts borrowed regularly can add up faster than expected.

8. Car Finance/Hire Purchase

Car finance is very common in the UK. Monthly payments, insurance, fuel and repairs can take a large portion of income.

If circumstances change – such as a drop in income or rising living costs – car finance payments can quickly become unaffordable.

9. Unexpected Life Changes

Unexpected events – emergency repairs, caring responsibilities, or sudden bills – are a common reason people get into debt. Without savings to fall back on, many people turn to borrowing to get through an unexpected financial shock.

These situations are often unavoidable and can affect even those who previously managed their money well.

10. Poor Budgeting Skills

Many people were never taught how to budget, manage credit, or understand interest rates. Without a clear understanding of how borrowing works, debt can build gradually without people realising how serious it has become.

This is especially common with credit cards, overdrafts and Buy Now, Pay Later agreements.