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2.3 million resorted to high-cost credit to meet basic needs

More than two million people have resorted to using high-cost credit to meet basic needs since the first lockdown, according to research from the Money Advice Trust.

The advice charity’s research has also found that an estimated 6.2 million adults have had to use credit more generally, to pay for essential costs such as groceries, utility bills and council tax.

 

The report found that one in nine adults are behind on one or more essential household bills or personal credit commitments as a result of the pandemic.

 

According to the research, some 10.2 million people are worried their finances will never fully recover from the pandemic. The charity said it fears it could be a long road to recovery for many.

 

The Money Advice Trust is calling for coordinated action by government, regulators and industry to help people back onto stable financial footing. Measures the charity is calling for include:

  • A fairer and more affordable approach to collecting debts owed to central and local government;
  • Specific help for renters who have fallen into debt as a result of the pandemic;
  • A discretionary grant scheme to support business owner-directors who ‘remain excluded from the government’s support measures’.

Joanna Elson, chief executive of the Money Advice Trust, said: “A year on from when the Covid-19 outbreak began, the finances of millions of households have been turned upside down, with the effects not felt equally.

 

“While some people have found themselves able to save more, others have fallen into financial difficulty – with many struggling to cover food and energy costs. It is clear that this is not just a health crisis but a financial one, too.”

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