The StepChange debt advice charity has warned that households in the UK are expected to build up £6bn in debt amid the Coronavirus pandemic.
Due to the growth of households falling behind on credit card payments and utility bills, a total of 4.6m households could risk dangerous levels of debt.
In response, the Treasury has said they plan to fund debt advice services by an additional £38m.
“We know that some people are struggling with their finances during this difficult time, which is why we want to make sure people can access the help and support they need to manage their debts and get their finances back on track,” said John Glen, economic secretary to the Treasury.
Research by YouGov has shown that each affected adult has accumulated an additional £1,076 of arrears and £997 of debt since the start of lockdown.
The chief executive of StepChange, Phil Andrew, said: “We were already dealing with a debt crisis, but COVID has so far added another four million people and counting to the number who are going to need help finding their way back to financial health. With £6bn of additional household debt directly attributable to the effects of the pandemic, this is a problem that isn’t going to solve itself.”
“As a charity, we have our own part to play. Like other debt charities, we are gearing up for a significant increase in demand for our usual services. We are also working on a specific solution to help people whose finances have been hit by the pandemic and who need a short term helping hand to get back on track without jeopardising their credit status.”
“The false calm in which we find ourselves while furlough and forbearance take the strain will not last indefinitely. We will be ready to help as more people find their debt problems crystallising over the coming months.”
