A charity has warned that debt is the “sleeping giant” of the problems created by the COVID-19 pandemic in the UK.
The fallout from the health crisis has already seen a surge in the number of people asking for help, whether it comes from food banks, mental health services or other charities that work on behalf of vulnerable people.
The growing number of job losses in the UK means that families who were already struggling are joined by families who have never imagined they are in need of universal credit or unable to put enough food on the table.
The Freedom Community Project in Bolsover, in northern Derbyshire, runs a food bank and financial advisory service. He saw a “harrowing” increase in demand during confinement.
Food bank volunteer Janet Koszegi told Sky News: “For you, you have to be professional when you talk to people but inside you are thinking” oh my god. “
“In the end you have to go to someone and say ‘look it’s heartbreaking’, knowing that someone hasn’t eaten for three days, a family who hasn’t eaten for three days – that happened quite recently.”
Calls to the project helpline quadrupled during the block at 2,000 per month.
Mark North, who runs the charity in the former mining area, told Sky News that debt levels are his biggest fear.
“I characterize him as the sleeping giant … he’s about to wake up, he’s starting to do it.”
He said he was worried about those “in one of those roles who won’t get back to work faster”, or who are “self-employed and rely on other people who can come back to bite you before you can actually generate the money to pay them” .
“This is my fear that sleeping there, waiting, will wake up and will cause a big problem in our communities.”
Local resident Stuart Wishart, who was collecting food packages for a relative from the Freedom Community Project food bank, told Sky News: “There are people out there who won’t talk to anyone … They are ashamed to do it, they are ashamed of coming here.
“They think it’s falling … it’s just borrowing, borrowing, borrowing all the time.”
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While some payment holidays will be extended, others will not, and the bailout ban on bailiffs should end on 23 August.
Dame Gillian Guy, CEO of Citizens Advice, said: “Whether it’s the 1.3 million families that we estimate have lost a city tax payment or the 2.6 million renters who have lost or expect to lose a payment of the rent, there are likely to be serious consequences for people who are left behind in their bills.
“The government took courageous action early in the epidemic to try to protect jobs and incomes. Now is the time for them to be equally brave in tackling the impending personal debt crisis in the UK.”
The monetary and pension service has stated that it expects a 60% increase in demand for debt advice by the end of 2021.