The number of people falling into ‘problem debt’ has doubled since March as a result of the coronavirus pandemic, a debt charity has warned.
StepChange said that 1.2 million Brits are now facing serious financial issues. Many are falling behind on essential bills, while some are taking on more credit to make repayments – causing debt to spiral.
Without long-term support, the charity warned that the UK was ‘sleep-walking into a debt crisis’.
Some lenders and utility companies have offered payment holidays to those affected by the crisis, but some of these deferrals have not been extended and there can be broader implications to accepting them.
StepChange said that 25 to 34-year-olds were most likely to be falling behind on bills and borrowing to make ends meet.
Single parent and low-income households were also likely to be struggling as a result of the coronavirus pandemic.
Tom Fox, Licensed Insolvency Practitioner at Umbrella Insolvency, said: “It’s no secret that many people are struggling due to the impact of the pandemic. While some have been able to work from home comfortably, many have seen their hours cut or their jobs vanish in recent months.
“Now, income and job losses coupled with sluggish economic growth is really starting to bite and we still look set for more disruption.
“Problem debt is particularly serious for borrowers. This is when people can’t afford to repay debts and start taking on new credit to make repayments or to pay for essentials like food, utilities and rent.
“Anyone that’s in this position should seek the help of a debt professional straight away.”
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