COVID Crisis ‘Pushing Millions More into Debt’
June 9, 2020
The coronavirus public health crisis and the wider ramifications are pushing millions of UK consumers into debt and into arrears on their essential bills.
For huge numbers of people, the resulting situation will mean relying on government support and the guidance of personal debt advisors.
The debt help charity StepChange estimates that more than four million UK households have already been pushed into debt since the COVID-19 crisis started and the resulting debts are reckoned to be worth in the region of £6 billion.
Around 1.7 million people have so far resorted to using credit cards to make ends meet, while high cost credit products are believed to have been used to make essential payments by almost a million UK consumers since we first went into lockdown in late March.
The latest figures show that people who were struggling with debt problems before the crisis are among those most likely to have been hit hardest financially in recent months.
StepChange is warning that there will be huge problems across society in the coming weeks unless coordinated action is taken by governments to provide worthwhile forms of support to individuals and families who have been badly affected by the virus situation.
The charity wants to see renters being protected from eviction, debt relief made available to people who desperately need it and Universal Credit reformed in ways that mean it gives households a better chance of coping with the financial crises that so many are currently facing.
“We were already dealing with a debt crisis, but Covid has so far added another four million people and counting to the number who are going to need help finding their way back to financial health,” said Phil Andrew from StepChange in a statement.
“With £6 billion of additional household debt directly attributable to the effects of the pandemic, this is a problem that isn’t going to solve itself.
“Cost might be seen as a barrier to the recommendations we outline. However, the costs of not intervening would ultimately be higher.”