Some 12 million people in Britain are likely to struggle with bills and loan repayments as the COVID-19 pandemic continues to wreak economic havoc, a Financial Conduct Authority survey tracking consumer financial resilience showed on Thursday.
The survey, conducted in July, found 12 million people in Britain had low financial resilience and also found that one-sixth of those people had become financially vulnerable since February, after lockdowns to control the virus slashed incomes and led to thousands of job cuts.
The survey, in which 7,000 people took part, showed that almost a third of adults have suffered a drop in income, while income for households has fallen by a quarter on average.
Black and Minority Ethnic respondents fared even worse, with 37% reporting a hit to their incomes.
More than a third of respondents, who already had low financial resilience and had a mortgage, said they were likely to fall behind on mortgage payments, while 42% of renters said they were worried about falling behind on their obligations.
36% of people feared falling behind on repayments linked to loans or credit cards.
“We want to remind consumers, especially those who are newly in financial difficulty that lenders are able to provide you with support,” Sheldon Mills, the FCA’s Interim Executive Director of Strategy and Competition said.
The regulator has put together a package of measures to ensure vulnerable households can access help after Oct. 31, when earlier COVID-19 relief initiatives such as loan and mortgage repayment breaks and the original Job Retention Scheme expire.
It has also encouraged borrowers to seek free advice on how to manage problem debts and urged banks and lenders to treat customers fairly, adding that firms should work with customers to provide support before they miss payments.
Options to negotiate new repayment plans, suspend, reduce, waive or cancel any further interest or charges will be open to customers, the FCA said.
However, banks needed to be transparent about how such actions could result in increased costs over the long term and how such support could impact personal credit profiles.
PLEASE HELP US KEEP GOING AD-FREE
This is a "Pay as You Feel" website.
Hey there! Thanks for stopping by. If you've enjoyed reading the articles on Labour Heartlands so far, We would be incredibly grateful if you could consider making a small donation. Labour Heathlands is not your typical news outlet. We are not here to simply regurgitate the daily news cycle, that's for the rest of them. Our focus is on delving deeper, uncovering the untold stories and shedding light on the issues that the mainstream media chooses to ignore.
Our unwavering commitment to journalistic integrity means that we are not influenced by any external forces. We are not beholden to PR companies, advertisers or press barons, and we refuse to let anyone dictate what we report on. Our editorial independence is sacrosanct, and our only allegiance is to the truth.
While we do not align ourselves with any particular political party, we stand firmly against corruption, injustice and the erosion of truth and the rule of law. We believe that accurate information is the lifeblood of a democracy and that facts are not up for debate.
Once again, thank you for your support – We truly couldn't do this without you!
