Since the beginning of the Covid-19 pandemic in the UK, we have monitored the impacts of the pandemic on personal finances and problem debt. In January 2021, we commissioned updated public polling to better understand how households have coped during the winter.
Here, you can find a summary of the report, including:
- How personal finances have been affected by the pandemic
- What the impacts of those changes have been
- The strategies those affected have used to cope
- The groups most exposed to financial difficulty and problem debt
How personal finances have been affected by coronavirus
Since the start of the pandemic, 11.3 million people have experienced a fall in income that affected their ability to meet day to day costs (and their income had not recovered in January 2021)
What impact have these changes had?
Due to falling incomes, 1 in 5 of those affected has fallen behind on at least one household bill; most often council tax, utilities or rent.
Hardship has also been experienced by 29% of those who experienced a fall in income, including skipping meals, rationing utilities or going without clothing or footwear appropriate for the weather.
What coping strategies are people using to get by?
Borrowing to make ends meet, drawing down savings and getting help from family or friends are the most common strategies employed to cope with income shocks.
Who has been most effected?
Nationally, 10.1 million people are showing signs of financial difficulty and 2.4 million are experiencing problem debt; four out of five of those experiencing problem debt have experienced an income shock since the beginning of the pandemic.
Financially vulnerable groups are more likely to have experienced negative impacts, including parents with young children and single parents, young renters and those in insecure work before the pandemic began.
Our Covid Debt Rescue campaign
We're campaigning to help renters struggling with arrears due to the pandemic stay in their homes and is calling on the government to extend the evictions ban and put in place a package of grants and loans to support renters in arrears. You can find out more here.
As the government winds down support schemes, it should also:
- Protect against undue enforcement action such as council tax enforcement using bailiffs
- Support households to make ends meet by maintaining the £20 uplift to Universal Credit beyond September this year
- Work with regulators to provide ways for those who are struggling to address arrears and debt affordably
Download the full report