Don’t let the Coronavirus crisis push people into debt

Over the past few weeks, thousands of us have been feeling less secure. Our incomes and wages have been cut, jobs have been lost, and many of us are unsure what’s going to hit us next.

Self-isolation from Covid-19 simply cannot be a privilege only some can afford.

Before the outbreak there were already 14 million people living in poverty, that’s 20% of the British population. Personal debt is at its highest ever level, with over 9 million people trapped in a cycle of problem debt.

With so many already anxiously balancing budgets, the health crisis is at risk of becoming a debt crisis.

Since the outbreak there have been a number of government announcements that will help: from guaranteeing wages up to £2500 a month, to an increase in Universal Credit. The Financial Conduct Authority, the body that regulates the banks has today proposed measures to freeze some debt payments.

But we need the Government to take further action make sure the outbreak doesn’t lead to rising levels of indebtedness in the UK.

The current rigged system of loans and interest rates makes it almost impossible to get out of a debt trap once you’re in it, that’s why together with nearly 80 academics, policy experts, and leaders of charities, trade unions and community groups, we’ll calling on the Government and the FCA to:

  1. Freeze repayments on all unsecured debt (including loans, credit cards, and rent-to-own finance), with no accrual of interest during the repayment holiday and no impact on credit records
  2. Freeze utility, rent and council tax payments, with no build up in arrears
  3. Write off council tax and social security debts
  4. Suspend all debt collection and enforcement activity with immediate effect

The government must do the right thing and make sure that people can sleep at night without worrying about piling up new debts because of the pandemic.

If you are worried about debt repayments, there are a number of places you can go to for advice:

Stepchange https://www.stepchange.org/debt-info/coronavirus-advice-for-clients.aspx Telephone: 0800 138 1111

National Debt Helpline: 0808 808 4000

The Citizens Advice Bureau http://www.citizensadvice.org.uk/debt-and-money/if-you-cant-pay-your-bills-because-of-coronavirus/

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