Compared to the Great Recession, households with low- to middle-incomes entered the present crisis more likely to be facing problem debt and struggling to pay for essentials. In December 2019, 3.2 million people in the UK were in severe problem debt and 9.8 million showing signs of financial distress.
The government has implemented a series of crucial public health measures to control the spread of coronavirus that have profound consequences for the economy and household finances.
The government has also put in place a series of unprecedented measures to protect incomes and businesses during the outbreak period. However, these schemes have not protected all households against loss of income.
Struggling households now face a cliff edge when temporary protections against eviction and enforcement action expire.
Policy makers should now turn their attention to preventing this outcome through a financial recovery strategy for households addressing three priorities:
- Strong protections against housing insecurity and unaffordable repayment demands
- Grants to address debts accumulated to pay for essentials during the crisis
- Investment and reforms to the social safety net to help struggling households recover
Here, you can find some of the key findings from our latest research: