More than 16 million UK adults have now experienced adverse credit, including missed payments, credit card arrears, CCJs and debt arrangements, according to new findings from Pepper Money.
The findings show that rising living costs and financial pressures are driving a sharp increase in credit struggles across the UK, with 30% of UK adults, equivalent to 16.6 million people, experiencing adverse credit, the highest figure since the study began nine years ago.
The data shows that credit difficulties are accelerating, not stabilising. More than half of those affected, 9.26 million adults, have experienced adverse credit within the last three years.
5.57 million UK adults missed at least one bill or repayment in the past year, with 67% going on to miss additional payments, up sharply from 46% the year before. For many households, one missed bill is no longer an isolated incident, but the start of an ongoing struggle.
Not just lower-income households at risk
The study challenges the idea that only those on tight budgets fall behind financially. Adverse credit is now increasingly common among high earners, with almost half (49%) of those earning over £100,000 reporting adverse credit at some point in their lives, compared to 35% of adults on under £50,000. In the last 12 months alone, 24% of six-figure earners missed a payment, versus 9% of lower-income earners.
Graduates and postgraduates report higher rates of repayments issues and CCJs than those without formal qualifications, suggesting that easier access to larger credit facilities against the backdrop of tuition fee debt is amplifying financial risk even among those traditionally seen as financially secure.
Younger adults struggling most with credit pressure
The report finds that younger generations are disproportionately affected. One in five (21%) 18–24-year-olds missed a payment in the last 12 months, compared to just 3% of those aged 55+. Over a three-year window, 28% of young adults have missed a credit card payment, falling steadily with age to just 4% in adults over 55.
The study attributes the rise in adverse credit to several converging pressures being felt by consumers. Almost a third (31%) cited sustained cost-of-living increases as the primary reason for having debt followed by a fifth (20%) facing unexpected expenses such as car repairs or home emergencies. Many adults are also supporting family members and children into adulthood, often without formal financial guidance. Rather than overspending, many households are simply struggling to absorb multiple rising costs at once.
Paul Adams, sales director at Pepper Money, said: “Adverse credit can impact us all, with higher earners reporting higher instances of experiencing adverse, it is increasingly a feature of modern financial life. These figures show just how close many households are to credit difficulty. Rising costs, irregular earnings and shifting borrowing habits are pushing millions to miss payments, which can lead to defaults and CCJs, including customers who have never struggled financially before.
"As adverse credit becomes more common, customers need more choice, not less. Together, brokers and specialist lenders can provide that choice and help people rebuild financial confidence, repair their credit, and continue their next step in homeownership.”
