The extent to which individuals and households across the UK are struggling with debt issues must not go overlooked by policymakers either within government or at the Bank of England.
That’s according to the debt help charity StepChange, which has sought to emphasise the point that while some people have seen their financial situations improving during the pandemic, many others are grappling with increasingly serious debt problems.
Peter Tutton, head of policy, research and public affairs at StepChange, has said that from a personal finance and household income perspective there has clearly been a “two-speed impact of the pandemic”.
“There are millions of households on low incomes living on the brink of being unable to make ends meet, or already in problem debt, and for many of these, debt problems have got worse rather than better,” Mr Tutton has said.
“It’s vital that public policy doesn’t leave people behind and does focus on getting much-needed support to people who continue to be impacted by Covid-related debt.”
Mr Tutton’s comments came in response to the publication of official data by the Bank of England, which shows a return to net borrowing across the UK’s consumer population as a whole.
For the past eight months there has been a net reduction in the scale of consumer borrowing but that trend was attributed to fewer people taking on new debt rather than because borrowers in general have been better able to make repayments.
StepChange has been making the point repeatedly in recent months that there are clearly a very large number of people in the UK borrowing more money to make ends meet in response to a reduction in their incomes.
In fact, the charity’s own figures suggest that roughly 6.3 million people have needed to borrow money since the pandemic started because their income declined.
The most common form of debt about which StepChange clients contacted the charity for advice in recent months was credit card debt, while one in 10 cited Covid-19 as the underlying reason why they’ve recently found themselves in problem debt.
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