Debt Storm Forecast After Payment Holidays End

Large numbers of households across Scotland could be facing serious financial problems once the option to defer their bills or their debt repayments ceases to be available.

Payment holidays have been widely taken up in Scotland and across the UK in recent months, with creditors realising that huge numbers of their customers were suddenly faced with significant financial hardship because of the coronavirus crisis.

But those holiday offers will soon be coming to an end and the consequences could be significant for a great many Scots.

Estimates suggest that around one in seven Scottish households were granted a ‘payment holiday’ at some point this year, with around half of those likely to find themselves struggling financially once their bills and their debt repayments are again being demanded in full.

Indeed, the Standard Life Foundation estimates that a majority of the 325,000 Scottish households who’ve taken up the offer of a payment holiday will be faced with debt problems in the coming months.

For many, the fundamental problem will be a lack of income, with so many jobs having been lost and so many other households having seen their incomes reduced to a lesser or greater extent since the coronavirus crisis began.  

Close to half of all those people in Scotland who took up the option of a payment holiday recently have no money at all set aside as savings, according to the Standard Life Foundation’s research.

Figures compiled by YouGov on behalf of the foundation suggest that there could soon be a huge rise in demand for debt advice across the UK.

In Scotland alone it’s estimated that there will be more than 100,000 households in need of debt advice once the payment holidays associated with their debts and their essential bills have elapsed.

The feeling among authors of the Standard Life Foundation’s reports on these issues is that relevant stakeholders, including creditors and regulators need to work together urgently to find solutions and ways to support people who could soon be really struggling to cope with their debt problems.

If you live anywhere in Scotland and you want to discuss how best to deal with your personal debt issues then Scotland Debt Solutions can help. Contact us directly to arrange a FREE and confidential consultation.