Household borrowing and arrears attributable to coronavirus have reached a combined £10.3bn, an increase of £4.3bn since May 2020, according to a new report from StepChange Debt Charity.
The same report found that the number of people affected by Covid-19 who are in severe problem debt has risen to 1.2 million, nearly doubling since March.
The charity has issued a warning that the country is facing a new and unprecedented debt crisis unless the government implements a clear, preventative plan to tackle it.
According to the report, the safety nets in place for those affected by coronavirus are not proving effective. Of those who have made an application for Universal Credit since March, 24% are in severe problem debt and 28% are showing signs of financial difficulty.
StepChange is calling on urgent government action, and has published a three-pillar strategy for recovery:
Phil Andrew, chief executive of StepChange, said: “This report paints a picture of a nation sleep-walking into a debt crisis. Despite a bold initial reaction to the pandemic, the government and financial service sector’s toolkit of responses has not evolved, and the result is a spiralling number of people being plunged into debt due to Covid-19, and the worst is yet to come.”
Household debt levels will be a key topic at the Collections and Vulnerability Summit on the 24-25 November.