Britain is often described as being in a ‘debt crisis’ – with outstanding personal debt currently standing at £1.4 trillion, and household debt double what it was ten years ago. And yet this number does nothing to describe what makes debt difficut (or not) for individuals. The political narrative around debt has fallen into the trap of seeing it purely as a financial issue, which can be fixed through structural changes to the lending industry to make debt more ‘affordable’. This top-down view of debt phenomenon entirely overlooks how different debts impact the lives of those experiencing them in different ways – financially, but also mentally, emotionally and socially.

This report aims to shine on debt from the bottom up, and in so doing reveals that there are many different experiences of debt. Based on original surveys, focus groups and expert workshops, The Borrowers compiles a ‘harm index’ of different debt types, assessing their impact across a range of indicators – including mental wellbeing and social consequences – to develop a holistic picture of the harm they cause.

The analysis not only provides a more granular understanding of problematic debt but also has lessons for how best to tackle it. As the Financial Conduct Authority takes charge of regulating consumer credit, the report recommenends a ‘polluter pays’ model to calculating its levy, where lenders pay according to the harm they cause. It also recommends a legal right for borrowers to negotiate directly with creditors. These and other measures would help to fill the existing gaps in support for people in debt, and build towards a policy narrative which recognises the more emotional aspects of debt.