Government Urged to Protect Debtors During Virus Fallout
May 20, 2020
Citizens Advice has urged the government to protect people who fall into serious debt during the fallout from the coronavirus crisis.
With the number of people claiming unemployment benefits having jumped by 70 per cent during April, financial problems and debt issues are set to become increasingly widespread in the coming weeks and months.
As a charity that helps people nationwide get to grips with their finances, Citizens Advice wants to see everyone who loses their jobs during the coronavirus pandemic given access to worthwhile support that helps them stabilise their circumstances and recover.
“With millions struggling to keep their heads above water, the government must ensure people can access adequate support through the benefits system and don’t face eviction or harsh debt collection as a result of this pandemic,” said Citizens Advice’s chief executive Dame Gillian Guy in a statement.
According to the Office for National Statistics (ONS), the number of people claiming unemployment benefits in the UK increased sharply to top 2 million during April.
Just over 850,000 people signed up for Universal Credit or Job Seekers Allowance last month, which represents the most significant surge in unemployment benefit claims recorded since comparable figures first started being collected in the early 1970s.
Around 8 million jobs are estimated to have been saved in the short term by the Job Retention Scheme, which has seen people being furloughed and their wages covered by government up to 80 per cent and £2,500 per month.
Furloughed workers are not classed by the ONS as being unemployed and many are expected to be brought back into full-time work later in the year but that is unlikely to be the case for everyone.
There are concerns as well that the number of people becoming unemployed and claiming unemployment benefits will continue to rise throughout the second quarter of this year and get close to 3 million very soon.
“Each job loss can mean a household struggling to make rent, cover their bills or pay for the food shop,” said Dame Gillian from Citizens Advice.
“The Job Retention Scheme has so far prevented more redundancies, but the pandemic has still been devastating for household incomes. And it could take a long time for the economy to recover.”