Today’s Budget, and the Bank of England interest rate cut and liquidity support, will provide some direct and indirect support during the uncertain period ahead. However, StepChange Debt Charity says that it is almost inevitable that demand for debt advice is set to increase – and that the structural problems exposed by Covid-19 run deep. People who experience life shocks that impact their income are three times more likely than others to experience problem debt.
Richard Lane, Director of External Affairs at StepChange Debt Charity, says: “Today’s announcements should help to underpin the economy through a rough patch, which is crucially important in supporting people’s jobs and hence their ability to meet their financial commitments – but individual households will also need more help. With nearly 10 million people in the UK already showing signs of financial distress, it’s crucial that comprehensive support is in place for households whose income is impacted.
“As our research last year showed, people who have suffered a life shock in the past two years are three times as likely to experience problem debt as those who haven’t. We’re already contacted by more than 600,000 people a year and the debt advice sector already struggles to meet demand, which can only be expected to rise if there is any protracted downturn.”