18m Brits pushed into debt by pandemic

One in three people have got into debt since the start of the pandemic, according to a new report.

The report by national poverty charity, Turn2us also reveals how families with three or more children are twice as likely to run out of money as families with only one child.

According to the report, one in three people (34%) have had to use some form of debt to get by since March 2020, with 6.4 million (12%) people using multiple forms of debt, such as a credit cards, overdrafts and loans.

Additionally, more than one in ten people (12%) have resorted to missing a bill or debt repayment since March. Before the pandemic only 3% of people were falling behind with credit payments.

And half of all people furloughed since March have had to use forms of debt, compared to just 23% of people who have seen no change to their employment.

The report also found that a third of people with a disability (33%) run out of money frequently, compared to only 18% of people without a disability.

While over a third of people from both Asian and Black ethnic backgrounds frequently run out of money (34%, 36%), only a fifth of people from white ethnic backgrounds experience frequently running out of money (21%).

And nearly a third of women (32%) could also only last a month or less if they lost their main source of income, compared to a quarter of men (25%).

‘The Covid pandemic has had a profound impact on people across the UK. Households are losing their jobs, falling into debt and fighting off the risk of hunger and homelessness,’ said charity chief executive, Thomas Lawson.

‘While many who were just about managing before the pandemic are now struggling day-to-day, certain groups have faced a clear and disproportionate affect; women, people with disabilities, larger families, Black and Asian people and those from other minoritized groups and younger people.

‘What is clear now is that financial resilience is at an all-time low. Even if a vaccine for Covid-19 becomes available tomorrow, the damage has been done to people’s finances. People have spent their savings and used up their rainy day funds, there is nothing left,’ added Mr Lawson.

 Photo Credit – TheDigitalArtist (Pixabay)