Millions Struggling with ‘Financial Long Covid’ as Support Schemes Wind Down

Millions of people across the UK are struggling financially due to the lingering effects of the Covid crisis.

According to the debt help charity StepChange, there are swathes of households nationwide in positions of real financial peril at a time when emergency support schemes are being scaled back or wound down.

A crucial area of support for people in debt recently has been the option of deferring credit payments on the basis of Covid-related difficulties.

However, as of April this year, that option is no longer being made available to people who find themselves struggling to make debt repayments.

StepChange research has found that close to a quarter (23 per cent) of the 1.6 million people who accessed credit payment deferrals due to Covid-related issues have subsequently missed repayment demands.

Meanwhile, 50 per cent of people who deferred their repayments as part of a Covid support scheme have only been able to meet their demands with at least some degree of difficulty.

StepChange estimates that around 14 million people living in the UK have found it more difficult to cover their essential costs because the pandemic impacted their incomes.

Of those people, around 11 million are thought to be still struggling to make ends meet as of the early weeks of 2021.

As much as £25 billion worth of personal debt and arrears is estimated to be owed essentially because of the pandemic, according to StepChange.

Roughly 2.8 million people are believed to have relied on some form of high-cost credit to cover their outgoings since the Covid crisis began in March 2020.

“As the country continues to try returning to normal, there are millions of households still struggling with covid debt for whom ‘normal’ is a distant dream,” said StepChange chief executive Phil Andrew in a statement.

“A year into the pandemic, many households’ coping mechanisms are exhausted and the temporary support measures that have kept them afloat are slowly being withdrawn.

“Without urgent action to shore up the finances of the millions struggling to meet essential costs, covid will cast a shadow over the economy for years to come.”

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