Advertisement
For £35 you can help a vendor keep themselves warm, dry, fed, earning and progressing
BUY A VENDOR SUPPORT KIT
News

UK 'sleepwalking' into crisis as household debt skyrockets to £10bn

UK debt has seen a dramatic increase over the pandemic, according to new research, as experts warn government must take action

Image credit: London Chow/Flickr

Covid-19 has caused household debt to skyrocket and forced millions of families into rent arrears, new research has found. 

The StepChange Charity said Covid-related household debt had hit £10.3 billion since the start of the pandemic and called on the government to provide more targeted support.

Phil Andrew, the charity’s chief executive, said the country was “sleep-walking” into a crisis and the worst was “yet to come” if the government didn’t change course. 

“Despite a bold initial reaction to the pandemic, the government and financial services sector’s toolkit of responses has not evolved, and the result is a spiralling number of people being plunged into debt due to Covid-19,” he said. 

The new report found the number of people affected by Covid who are in “severe problem debt”, defined as meeting three or more of the charities eight indicators, has risen to 1.2 million, nearly doubling since March. 

Advertisement
Advertisement

StepChange also found that 3 million people in total are at risk of falling into long-term financial difficulty. 

The charity said 14.9 million people, almost 30 per cent of the adult population, have experienced a “negative change of circumstance” such as redundancy, furlough or a salary reduction. 

A further 7.1 million have fallen behind on essentials or had to borrow to make ends meet, with those between 25 and 34 most likely to be struggling. 

The UK’s furlough scheme has been extended following England’s second national lockdown, but there are fears it may not be enough for those who have already been made redundant. 

StepChange is calling on the government to introduce no-interest loans with deferred repayment which depends on income. 

Advertisement

Andrew added: “This winter, a second national lockdown will drive unemployment, reduced hours and rising energy bills, all of which is hampering economic recovery. 

“Without a bold, long-term vision for those financially affected by the pandemic, there is a real danger of lasting economic and social damage that will deepen inequality, jeopardise the government’s levelling-up ambitions and act as a drag on economic recovery.

“Strengthening short-term protections like furlough will buy time for those experiencing temporary financial difficulty. 

“Now we need to see the Government provide targeted funding that can enable households to exit safely from coronavirus debt.

“Concentrating support in this way can reduce the hardship and damaging impact of long-term debt on health, mental health and the economy, as well as countering the impact of coronavirus on inequality.”

Advertisement

Have you been affected by the economic impact of the coronavirus pandemic? The Big Issue is committed to supporting its readers and find ways to help people stay in their jobs and in their homes through our Ride Out Recession Alliance. Send your stories and ideas to rora@bigissue.com to help us support those who need it most.

Advertisement

Change a vendor's life this Christmas

This Christmas, 3.8 million people across the UK will be facing extreme poverty. Thousands of those struggling will turn to selling the Big Issue as a vital source of income - they need your support to earn and lift themselves out of poverty.

Recommended for you

View all
'We must remove the shackles of stigma': Five ways Labour wants to shake-up Right to Buy
Labour deputy prime minister abd housing secretary Angela Rayner
Right to Buy

'We must remove the shackles of stigma': Five ways Labour wants to shake-up Right to Buy

Rents in UK are rising at highest rate in decades. Will they keep going up?
rents uk
Renting

Rents in UK are rising at highest rate in decades. Will they keep going up?

'Dismay' for disabled and vulnerable households as average annual energy bills to rise to £1,738
Blue flames from a gas hob
Energy bills

'Dismay' for disabled and vulnerable households as average annual energy bills to rise to £1,738

Mum-of-three hit with 'revenge eviction' after asking for repairs: 'It felt like the end of the world'
Hazell and her three kids faced homelessness until Shelter stepped in
Renting

Mum-of-three hit with 'revenge eviction' after asking for repairs: 'It felt like the end of the world'

Most Popular

Read All
Renters pay their landlords' buy-to-let mortgages, so they should get a share of the profits
Renters: A mortgage lender's window advertising buy-to-let products
1.

Renters pay their landlords' buy-to-let mortgages, so they should get a share of the profits

Exclusive: Disabled people are 'set up to fail' by the DWP in target-driven disability benefits system, whistleblowers reveal
Pound coins on a piece of paper with disability living allowancve
2.

Exclusive: Disabled people are 'set up to fail' by the DWP in target-driven disability benefits system, whistleblowers reveal

Cost of living payment 2024: Where to get help now the scheme is over
next dwp cost of living payment 2023
3.

Cost of living payment 2024: Where to get help now the scheme is over

Strike dates 2023: From train drivers to NHS doctors, here are the dates to know
4.

Strike dates 2023: From train drivers to NHS doctors, here are the dates to know