As many as 12 million adults across the UK were struggling with debt and battling to keep pace with demands on their finances in July this year, according to the Financial Conduct Authority (FCA).
The financial service sector’s main regulator has been conducting polling nationwide recently and found that a growing number of people can be categorised as having “low financial resilience”.
Around 2 million people are understood to have been forced into a position of low financial resilience directly because of the Covid-19 crisis, while many others were already in that position prior to the pandemic.
In recent months, debtors have been able to take advantage of repayment holidays if they’ve been badly affected by the pandemic but for a lot of people the financial pressures continue to pile up.
Indeed, around 31 per cent of people have seen their incomes reduced because of Covid-19, according to the FCA, which has made clear to people in debt that they can still make arrangements with their creditors if they’re struggling to meet their repayment demands.
It is obvious from the FCA’s research that the number of people with limited financial resilience has been rising recently and that those in that category will be among those most likely to fall behind on their debt repayments as the pandemic goes on.
Certainly, there are widespread worries among those without much financial resilience about how they will cope in terms of managing their money in the coming months.
“We want to remind consumers, especially those who are newly in financial difficulty, that lenders are able to provide you with support,” said Sheldon Mills, interim executive director of strategy and competition at the FCA.
“There are options available to you which will reflect the uncertainties and challenges that many customers will face in the coming months.
“It is also important that households in serious financial difficulty seek debt advice for support.”
The FCA has been emphasising that help in managing debt is available both to people who have already taken advantage of repayment holidays and those who are only now in the position of needing to defer their repayments.
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