Coronavirus pressures 'have driven up debt'

The number of people finding it hard to keep up with bills and credit commitments has doubled since the start of the pandemic, research by a debt charity suggests.

Nearly one in three British adults – an estimated 15million people – say they are now struggling to meet their financial commitments compared 7.5million in March 2020, according to a survey for StepChange.

The findings are part of a new report by the charity which reveals that the pandemic has further entrenched the use of consumer credit.

The charity estimates around 8.6million people in financial difficulty borrowed £26billion to cover their basic needs in the last year, including 3.5million who used credit to pay essential bills.

Two thirds of those in difficulty (65%) had kept up with credit repayments by missing bills, borrowing from family and friends or cutting back to the point of hardship.

StepChangechiefexecutive Phil Andrew said: "The sharp rise in the number of people struggling to meet their financialcommitmentsshouldraise alarm bells across Government, banks and regulators.

"Those responsible for steering us through these choppy financial waters need tobeattunedtotheharmmany credit products, made available to people on the cusp of financial difficulty, can cause."

He added: "The new Consumer Duty is a crucial opportunity for firms to redesign products and change practices to ensure credit does not exploit financial difficulty and thatthoseindifficultygeteffective help fast.

YouGov surveyed 5,028 adults in October and StepChange surveyed 550 clients online who first contacted the charity in 2021.