The Pandemic has Caused a ‘Debt time-bomb’ for Thousands of Brits

Thousands of Brits are now saddled with “debt time-bombs” as a result of the COVID pandemic according to charities and new stats make for dire reading.

According to recent reports, the financial health of UK households is at a crisis point:

  • 11.1 million households have accumulated £25 billion in arrears and debt since March 2020 due to the financial pressures of the pandemic. (StepChange).
  • Nearly half a million private-sector renters fell behind on their rent in January 2021, up from 230,000 in May 2020 (StepChange).
  • 2 million private-sector renters have experienced mental health problems due to money worries during the pandemic (StepChange).
  • 1 in 4 UK adults say that they’re in debt because of the pandemic.
  • People aged 25-34 are the demographic that took on the most debt into 2021.

Research by money.co.uk revealed that the average amount of debt owed in the UK in 2020 is £9,246 per person, with one in 10 people attributing their financial stresses to having to live off reduced income due to being put on furlough.

According to StepChange, the fallout of the pandemic will put an extra 3 million people at risk of joining the 1.2 million people in severe financial difficulty.

debt

The charity defines severe problem debt as meeting at least three of its indicators, including falling behind on essential bills or using credit to make debt repayments.

Phil Andrew, CEO of debt charity StepChange said that we’re a “nation sleep-walking into a debt crisis,” and he warned that protective measures by the government and banks had not kept up with the situation.

Where to go for help with debt

debt

First of all, if you’re in debt and need help, please know that there’s no shame in reaching out. There are many organisations and charities that offer free support and guidance.

StepChange is just one of them and they help thousands of people every year.

You can get debt advice from StepChange either online or over the phone via a simple, three-step process:

  1. They’ll help you work out your budget, income and debts
  2. They’ll use this information to find a solution to your debt that suits your situation
  3. They’ll set up your debt solution, and offer support however long it’s needed

Find the right help for your situation and click here.

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