As temporary support schemes are withdrawn, debt charity highlights that millions are still struggling and that the 'long tail of debt problems shows little sign of abating'
The debt charity StepChange has called on the government to put measures in place to support those who are experiencing 'financial long Covid'.
A year on from the start of the Covid-19 pandemic, StepChange highlights that as of 1 April 2021 people can no longer apply for payment deferrals which were introduced as a temporary measure to support people who had suffered a hit to their income. However, the debt charity warns that the crisis is far from over and that -
'... millions are still struggling financially, redundancies and unemployment are looming and the long tail of debt problems shows little sign of abating.'
Referring to its January 2021 report Stormy Weather - that highlights the impacts of the pandemic on personal finances and problem debt - StepChange estimates that since March 2020 -
more than 14 million people have suffered a hit to their income which has affected their ability to pay for essential costs, of which 11 million are still struggling;
£25 billion of arrears and borrowing has been built up as a direct result of Covid-19, with 10.6 million people having borrowed to make ends meet;
nearly half (45 per cent) of those who started receiving universal credit have experienced hardship, while six in ten are showing signs of financial difficulty; and
nearly half a million private renters have fallen behind on their rent, accruing an estimated £370 million in arrears.
Calling on the government and regulators to put measures in place to support households experiencing 'financial long Covid', StepChange CEO Phil Andrew said -
'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. 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coping mechanisms are exhausted and the temporary support measures that have kept them afloat are slowly being withdrawn.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.
It is within the government and regulators’ gift to support those hit hardest by the pandemic, but it will require coherent, long-term planning and financial backing. By implementing measures including the creation of an emergency financial package for renters, a permanent £20 uplift to universal credit and new packages of targeted support to help people address covid-related arrears and debt affordably, we can reduce the risk of financial long covid for households across the country.'
For more information, see Millions facing ‘financial long covid’ need urgent support from stepchange.org