John Newton, the author of the song, had a bad reputation in his youth; he was known for this bad habits. He became involved in the Atlantic slave trade for years, and after a violent storm battered his vessel so severely off the coast of County Donegal, Ireland, he called out to God for mercy. This moment marked his spiritual conversion.
"Wretch" also represents a period in Newton's life when he saw himself outcast and miserable, as he himself became a slave of Princess Peye, a woman of the Sherbro people; his own arrogance was matched by how far he had fallen in his life.