Coronavirus: British people threatened by debt tsunami

Text by: RFI Follow

Before the coronavirus crisis, ten million Britons were in financial difficulty. Since then, 4.6 million more people have contracted 6.8 billion euros in additional debt, according to a report by the British association StepChange, which helps households in difficulty.

Publicity

The coronavirus pandemic is exacerbating the financial problems of British households, many of whom are struggling to pay their bills, according to a report by the StepChange association . She mentions a debt  tsunami  , especially since 70% of these people had no financial problems before the crisis.

We're calling for a £ 5bn fund to help people with debt they can't afford. This is less than @OBR_UK cost estimates of other coronavirus support:

👔 £ 50bn job retention scheme
👷 £ 10.5bn self employment scheme
🏢 £ 15bn small business grants

Full report - https://t.co/1MykJN5FKG

The abrupt cessation of activity since the end of March and the surge in unemployment has weakened many Britons who often already had trouble making ends meet. And the association fears that the phenomenon will worsen even before the containment is completely lifted and once government support measures such as partial unemployment or grace periods for certain payments are withdrawn.

1.2 million Britons were unable to pay their water and electricity bills

"  People are affected in many ways and it is sometimes directly related to government assistance, " said Sue Anderson, spokesperson for StepChange. Those whose income has collapsed have been authorized to exceed the repayment terms of their credit, their home loans for example. But despite this, they could not repay on time. Others are no longer able to pay their bills, especially their rent. They will find it very difficult to get out of it. "

Since the restrictions began, the report says 1.2 million people are behind on their water and electricity bills, 820,000 on local taxes and 590,000 on rent.

"  We also know that millions of people have had to borrow," says Sue Anderson. So the government has put in place a support plan, such as a minimum income for those who have been unable to work, but this aid will expire. And all these people will end up with arrears that they will not be able to repay while their wages will not return to normal for a long time. So the government must put in place transition measures for the post-pandemic period.  "

A new government envelope

StepChange expects associations like its own to see a doubling of requests for advice from households by the end of the year.

The government for its part announced Tuesday a new gesture with funding of 37.8 million pounds (about 42.4 million euros) to support associations that help people in debt. "  We know that people are having financial problems during this difficult time and that is why we want to make sure that they can receive the help they need to manage their debt and get their finances back on their feet,  " said John Glen, Secretary of State for the Treasury.

Newsletter Receive all international news directly in your mailbox

Follow all international news by downloading the RFI application

• United Kingdom
• Coronavirus
• Confinement
• Finance
• Economic crisis
• Poverty

On the same subject

Airlines Ryanair and Easyjet ignore quarantine

United Kingdom: travelers arriving from abroad now subject to a fortnight

Coronavirus in the UK: reopening schools slowly, but much discussed