Thomas Andre Fure/Shutterstock

You get a payment reminder through the letterbox, maybe for a credit card, an overdraft, a bill, or a parking fine. You ignore it and leave the envelope unopened, or put it to one side to deal with later. Many of us will recognise this scenario.

Ignoring debts and other payment commitments is often dismissed as being irresponsible. But a closer look reveals that many people see things differently, reflecting a deeper point about inequality in Britain today.

To understand people’s experiences of debt problems better, I lived in a low-income community in the south of England for 18 months, where debt problems were commonplace. I also interviewed debt advisers and their clients across the UK. It gave me a unique opportunity to understand their situation and how they respond to debt, something which I detail in my new book.

While debt relative to income is falling, the total amount of unsecured household debt now far outstrips its peak during the 2008 global financial crisis.

Amid big rises in the cost of living, more and more people have been borrowing money to cover essentials like food, energy, rent or council tax. In October 2024, 4 million low-income households held loans they took out for this purpose, and nearly nine out of ten of them were going without essentials anyway.

Meanwhile, lenders continue to charge the highest interest to those least able to afford it. In 2024, an estimated 5.5 million people were falling behind on their bills or credit repayments.

In the community where I lived, many people worked, but their wages were not enough to afford what they needed. So residents borrowed money to make ends meet, claimed welfare benefits or did cash-in-hand work. This reflects a broader reality with labour markets in Britain today, where 4.5 million wage-workers are paid below the real living wage.

As a result, most of the residents I worked with were in arrears with one or more payments. They received phone calls, letters and knocks at the door from debt collectors, threatening court orders, or they had to deal with bailiffs trying to seize their possessions. Some worried about being evicted.

This is a distressing situation that can easily lead to mental health problems. Debt problems are strongly linked to diagnosed mental health disorders and even suicide. All of the debt advice clients I interviewed had experienced anxiety, depression, suicidal thoughts or other mental health issues.

Making light

However, in the community where I temporarily lived, many residents had found ways to try to stay optimistic despite the threats of debt enforcement. Some made light of their debts by joking about how bad they were at repaying or how poor their credit ratings were.

Many people focused on their home and family life. One woman worried about it being “a skint few weeks”, saying: “We’ll get through it. We always do. You just focus on what’s around you.”

An unemployed man in his late forties told me how his pride in his 12-year-old daughter kept him from “going suicidal”.

Most of all, though, people avoided their creditors. Residents often strained to meet repayment demands, but just as often they ignored them. They hung up the telephone when debt collectors called, left envelopes unopened or stashed away, or pretended not to be at home if bailiffs visited. One man said when he received a demand to pay his water bills: “Well, they can fuck off,” and threw the letter in the bin.

Trying to deal with debt head-on, in the sense of paying what debt collectors were demanding by the exact time they demanded it, could create immense anxiety and even physical health problems. One man told me: “You know, for a while I was trying to keep on top of them and eventually … well, it was making me ill [because of worrying about it]. So I couldn’t keep on like that. I just left them and got on with things.”

These accounts reveal a deeper point about inequality in Britain. Financial lending tends to extract wealth from those with less and transfer it towards the better-off. Debt is a systemic feature of our economy, and debt problems have complex causes. However, the threat of enforcement convinces many people they are single-handedly responsible for being in debt. This places the blame for poverty on the shoulders of those experiencing it, subtly implying the wealthy are morally superior.

Stigma

More than mere personal prejudice, the stigma around debt is hard-wired into the legal system. If we assume that every legally valid debt must be paid as a moral duty, no matter what, then we ignore the economic realities that make borrowing a necessity for so many. This simplistic assumption only reinforces the hardship of those in debt.

Take the example of people ignoring their debts. Usually they are labelled as irresponsible or lacking financial skills. But ignoring debts is often a deliberate response to a situation that people find immoral or harmful to their health.

It is tempting to think that if debt is the problem, the remedy is to reform it. Subsidising credit so lower-income groups pay lower interest, restoring funding for debt advice, amplifying the voices of those who have been in debt and widening access to insolvency and debt cancellation could all improve things.

But reliance on borrowing is also a symptom of broader issues. These may be better addressed by efforts to redistribute resources and curb coercive sanctions, such as taxing wealth, guaranteeing higher incomes (both wages and benefits), controlling the cost of rent and other essentials, protecting against eviction and abolishing bailiffs.

In the meantime, many indebted people on low incomes will continue to ignore debt collectors’ demands. Through their actions, I believe they question the widely held assumption that there is always a moral duty to pay in our unequal world.

Ryan Davey has received funding from the Economic and Social Research Council, the William Wyse Fund and the Cambridge Political Economy Society Trust at the University of Cambridge, and a Vice-Chancellor’s Fellowship at the University of Bristol.