Sharon McDougall - 15th April 2021 - 2 minutes to read
The dynamics of the Covid-19 pandemic have meant that millions of households across the UK have effectively been kicking the issue of dealing with their problem debts down the road.
That’s according to the debt help charity StepChange, which estimates that the number of Brits dealing with problem debts has increased from around 1.7 million to almost 2.4 million over the course of the pandemic.
Despite the finances of so many people having been hit hard by the virus crisis, relatively few people have been reaching out to third parties for expert advice on the associated issues.
That situation can be explained at least in part by the prevalence of temporary support measures, such as the government-backed furlough scheme and the repayment break options being offered by creditors.
However, with those schemes being tapered off or ended, the view among the experts at StepChange is that there is a significant amount of “pent up demand” across the UK population for debt advice and support in dealing with financial problems.
The charity has said that it is “perhaps no surprise” that so many people have put off dealing with their problem debts during the pandemic but made clear that its recommendation as an organisation is to “take advice early rather than wait”.
According to the latest figures released by StepChange in relation to the full year of 2020, problem debt disproportionately affected single parents and people who are renters rather than homeowners.
The charity has pointed out that while the pandemic has had a big impact on the finances of millions of households, many of the underlying causes of problem debt pre-date the Covid crisis and have remained “as pernicious as ever”.
“Despite problem debt increasing, and our website running red hot as a huge influx of people sought information, we actually took fewer clients through full debt advice as many adopted a ‘wait and hope’ approach to their latent financial difficulties,” noted Phil Andrew, StepChange’s chief executive, in a statement.
“Looking ahead, the route out of Covid-induced debt for many households is not yet clear. We are seeking to work urgently with other stakeholders to chart a safe passage for as many households as possible.”
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