If you collect debts in the UK, today’s jobs numbers are a warning light: when unemployment rises and wage growth slows, arrears usually follow. And with credit card borrowing costs hitting fresh highs, the “can’t pay” segment can grow fast.

What happened

1. UK unemployment rose to 5.2% in Q4 2025, the highest since early 2021.

2. Youth unemployment (18 to 24) reached 14%, a 5-year high and described as a joint 10-year high excluding the pandemic period.

3. Pay growth slowed, and the market reaction was immediate: traders increased expectations that the Bank of England could cut rates in March, with money markets pointing to around a 75% chance of a cut to 3.5%.

4. Separately, the average credit card purchase APR was reported at 35.8% in February, the highest since records began in June 2006.

Why debt collectors should care

More job insecurity pushes more households into “priority bills first” behaviour (rent, council tax, utilities), leaving less for unsecured credit and discretionary repayments.

Slower wage growth reduces the ability to stabilise repayment plans, even for people still in work.

Youth unemployment matters because younger borrowers often have thinner savings buffers, higher rent exposure, and are more likely to rely on overdrafts, BNPL, and credit cards.

High card APRs are the accelerant: balances grow faster, minimum payments bite harder, and a small, missed payment can snowball into a delinquency cycle.

What to watch next

1. Payment plan performance

Expect a higher rate of “plan breaks” (missed instalments) and a bigger spread between prime and subprime outcomes.

2. Hardship and vulnerability signals

Job loss, reduced hours, and “in between roles” stories will show up more. Train agents to identify vulnerability and triage early, not at month 3.

3. Creditor strategy shift if rates fall

If rate-cut expectations strengthen, some lenders may adjust settlement appetite and pre-legal strategies. The key is timing: borrowers feel relief last, not first.

Practical playbook for collectors

1. Move earlier on engagement, not escalation

* Day 1 to 7: multi-channel nudges focused on options, not threats.

* Day 8 to 21: structured affordability conversation, with a clear “repay, pause, or evidence” decision.

2. Tighten affordability capture

Ask for simple, consistent inputs:

* Employment status change in last 90 days

* Housing cost trend (up, flat, down)

* Priority arrears (yes or no)

Then use that to route: maintain plan, reduce plan, short pause, or specialist support.

3. Offer shorter “stabilisation plans”

In a weakening labour market, 30 to 60 day stabilisation plans can outperform long plans that fail quickly. The goal is re-engagement and habit, then reassess.

4. Refresh tone and scripting for youth borrowers

If 18 to 24 unemployment is rising, rewrite scripts for:

* Smaller, more frequent payments

* App-based self-serve options

* Clear signposting to free debt advice early (to protect outcomes and reduce complaints)

5. For B2B collections: tighten credit control triggers

When macro pressure rises, do not wait for 60+ days past due to act.

* Confirm PO and dispute status early

* Re-issue statements faster

* Escalate “silent” accounts earlier, because silence often precedes insolvency risk

#UKEconomy #Unemployment #DebtCollection #CreditControl #Arrears #Collections #Insolvency #CashFlow #LatePayments #ConsumerCredit #CreditCards #FinancialWellbeing #Vulnerability #UKBusiness #SMEFinance

Welcome to Debt Matters, the podcast where we turn the latest UK headlines into practical insights on arrears, recovery, and cashflow. Today we’re looking at a fresh consumer confidence survey that suggests UK households are feeling bleak about their finances, with debts rising and savings under pressure and what that means for collections and repayment behaviour.

What happened

A new S and P Global survey reported that UK consumer confidence is at its lowest level in 2 years. The research points to households feeling pessimistic about their personal finances, increasingly worried about mounting debt, weaker prospects, and shrinking savings.

The main stats

The UK Consumer Sentiment Index was 44.8 in February, below the neutral 50 level that signals improving confidence.

The reading was only slightly higher than January’s 44.6, but still among the weakest results of the past 2 years.

The sharpest reported debt increases were among 18 to 24-year-olds, who the report links with the highest unemployment rate since 2020.

Why this matters for debt collection

People prioritise essentials and delay non-urgent repayments If households feel squeezed, they tend to protect rent, council tax, utilities, and food first — and everything else gets pushed back. That can mean higher early-stage delinquency across consumer credit, telecoms, and discretionary services.

More “can’t pay” cases, not “won’t pay” Rising debt plus falling savings often means customers do not have a buffer. That changes the best collections approach: more supportive engagement, better affordability checks, and realistic repayment plans — because aggressive chasing can increase complaints, vulnerability flags, and drop-off.

Younger borrowers become a bigger risk pocket The survey highlights pressure on 18 to 24s. For creditors, that’s a reminder to watch portfolios with younger demographics and products that skew younger and to get proactive with early outreach before accounts roll into harder-to-recover stages.

What to watch next

Promise-to-pay kept rate: if it drops, people are overcommitting.

Arrangement re-defaults: a rise usually means plans are unaffordable.

Contact channel shifts: more customers avoiding calls but responding to SMS or email can signal stress.

Hardship and vulnerability markers: expect more disclosures around job loss, reduced hours, illness, and caring responsibilities.

Practical takeaways

For creditors and collections teams:

Improve early-stage engagement: simple options, fewer hoops, clear “how to get help” messaging.

Use short, flexible repayment plans and review them quickly rather than locking customers into unrealistic schedules.

Make vulnerability support visible, and document decisions clearly — it reduces disputes later.

For listeners worried about debt:

Do not wait for arrears to spiral. Contact the creditor early, explain what’s changed, and ask for a plan that fits what you can genuinely afford.

List essentials first, then offer a realistic amount — even if it’s small. A workable plan beats a broken promise.

#DebtMatters #UKDebt #DebtCollection #Arrears #Cashflow #ConsumerConfidence #CostOfLiving #PersonalFinance #CreditRisk #Collections #Affordability #Vulnerability #UKEconomy #SMPayments #FinancialWellbeing

Welcome to Debt Matters, the UK podcast where we turn the latest headlines into practical insights on arrears, recovery, and cashflow. Today we’re looking at fresh signals that the UK housing market may be stabilising, and what that could mean for debt, repayments, and collections.

What happened

A new survey from the Royal Institution of Chartered Surveyors suggests the housing downturn eased in January. RICS’ indicators for new buyer enquiries and house prices improved, adding to recent lender updates showing house prices rising last month.

The numbers that matter

* RICS house price balance rose to -10% (highest since June), up from -13% in December.

* New buyer enquiries improved to -15% from -21% (highest since July).

* RICS says activity is still subdued, so any recovery is likely to be gradual.

* Optimism for sales over the next 12 months rose to its highest level since December 2024.

Why this matters for debt and collections in the UK

1. A steadier housing market can reduce panic-driven arrears, but it does not remove pressure

When people feel conditions are improving, they’re more likely to keep paying priority bills (mortgage, rent, council tax) and engage earlier when they hit trouble. That can mean more repayment plans and fewer “go dark” accounts. But “improving” does not mean “easy” — the survey still shows negative balances, just less negative.

2. Credit demand tends to rise when confidence returns

If buyers believe the market has stopped sliding, we often see more applications, more spending around moves (repairs, furniture, fees), and more use of short-term credit. For collections, that can mean a delayed wave: higher credit usage now can translate into higher unsecured arrears later, especially if budgets were already tight.

3. Landlords, tenants, and rent arrears: watch the mismatch

If sales optimism improves, some landlords may choose to sell, refinance, or adjust their portfolios. That can create disruption for tenants and sometimes changes in rent collection behaviour. For agents and landlords, this is when consistent arrears processes matter most: early contact, clear payment plans, and documenting vulnerability.

4. For businesses: housing activity influences local cashflow

More transactions and house moves can lift sectors like trades, removals, home improvement, and local retail. That’s good for invoices getting paid — but it also creates new trade credit exposures. If you’re supplying services on account, tighten your credit control now, while customers are optimistic.

If you’re a household

* Treat housing “green shoots” as a chance to stabilise your budget: list your priority bills, set payment dates, and contact creditors early if you feel strain.

* If you’re behind, ask for a structured repayment plan in writing and stick to one plan you can actually afford.

If you’re a landlord or managing agent

* Build a simple arrears timeline: day 1 reminder, day 7 follow-up, day 14 payment plan options, and clear escalation triggers.

* Keep vulnerability handling consistent — it protects tenants and reduces complaints and write-offs.

If you’re an SME extending credit

* Refresh credit checks and limits for customers linked to housing activity (trades, property services).

* Tighten terms on new work: staged payments, deposits, and clear consequences for late payment.

#DebtMatters #UKDebt #DebtCollection #CreditControl #Arrears #Cashflow #Insolvency #PersonalFinance #Mortgages #RentArrears #HousingMarket #PropertyNews #UKEconomy #LatePayments #SMEFinance