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Major restructuring in restaurant and retail sectors
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VAT deferral: Firms will pay in full from July 1st
VAT deferral: Firms will pay in full from July 1st
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Major restructuring in restaurant and retail sectors
Major restructuring in restaurant and retail sectors
11th June 2020
VAT deferral: Firms will pay in full from July 1st
VAT deferral: Firms will pay in full from July 1st
25th June 2020
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Coronavirus: Households will rack up £6bn in debt

Coronavirus: Households will rack up £6bn in debt

Coronavirus: Households will rack up £6bn in debt

British households are expected to rack up debts worth a combined £6bn during the coronavirus health crisis, StepChange claims.

As millions fall behind on credit card payments, council tax and utility bills, the debt advice organisation said that 4.6m households could build up dangerous levels of debt due to the pandemic.

Along with other debt advice charities, StepChange said that they were planning for a doubling in demand for their services as lockdown leads to rising job losses, reduced working hours and lower rates of pay.

A study by the charity found that each affected adult has accumulated an additional £1,076 of arrears and £997 of debt on average due to the health crisis.

The charity called for a broad package of support for those most affected by the coronavirus, arguing that the cost of not intervening would be far greater in the long term. StepChange urged councils and utility regulators to introduce support for people that were behind on their bills.

They also called for a £5 billion fund to support those that have fallen through the cracks in other support schemes. It said the fund should ‘provide grants to households negatively affected by coronavirus to repay arrears and debt accumulated to pay for essentials during the crisis.’

Umbrella Insolvency Licensed Insolvency Practitioner, Tom Fox, said: “The impact of coronavirus is not equal across society. While many people are falling behind on bills and credit card payments, others have been able to save more because lockdown has stopped them from eating and drinking out, visiting non-essential shops and commuting for work.

“The Bank of England recently announced that UK households repaid a record £7.4bn of credit card debt in April. But this survey evidence from StepChange shows that away from that surface level figure, many people are struggling and building up problem levels of debt.

“When government support schemes begin to end, and mortgage and credit card payment holidays finish, we could see a real tsunami of personal insolvency claims.”

To learn more about your options with personal insolvency, speak to a member of the Umbrella.UK insolvency team today. Call: 0800 611 8888.