Millions in the UK face a debt crisis
The Financial Conduct Authority (FCA) is calling on borrowers affected by Coronavirus lockdowns to seek support from lenders, after new data reveals that 12 million Britons are likely to struggle with bills or loan repayments.
The UK’s financial regulator has told consumers in difficulty to speak with banks and other providers of credit about their debts and seek advice from organisations and professional advisers.
It has also asked banks to offer more payment options to borrowers, who have recently seen the mortgage, car finance and credit card payment holiday extended for a further six months in light of the new restrictions.
The FCA’s calls come on the back of a nationwide study that found 31 per cent of adults had experienced a drop in household income during the COVID-19 pandemic. The FCA research, conducted back in July, also found that average household income was down by a quarter.
A fall in income was more common amongst those aged under 35 and individuals from black, Asian and minority ethnic backgrounds.
This has led to an additional two million people in Britain being classified as having “low financial resilience”, meaning they may struggle to cover bills or debts, bringing the total to 12 million Britons.
Responding to the findings, the FCA said: “The increasing Coronavirus-related restrictions placed on a number of areas of the UK in recent weeks may lead to increased financial difficulty for some people.”
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