The UK government has been urged to strengthen welfare protections and extend the furlough scheme into 2021 after new research revealed that six million people have fallen behind on bills because of the coronavirus pandemic.
The research by Citizens Advice shows one in nine people have reported falling behind on household bills – with around a fifth having to go without essentials – because of the impact of Covid-19.
Carers, key workers, black people, people with disabilities and those who are shielding are twice as likely to have fallen behind on bill payments.
The research also suggests that one in five have been forced to sell possessions to make ends meet, according to the charity’s representative poll of 6,000 people.
Since March, the government has suspended the enforcement of repossession orders and barred bailiffs from visiting people’s homes. However, from this Sunday (23 August) both of these protections expire. Citizens Advice warns this will leave people behind on their rent at the risk of eviction and those behind on bills, especially council tax, at risk of having the bailiffs knocking on their door.
The charity fears that Covid-19 will leave a “lasting legacy” by trapping people in debt they are unable to escape from.
Citizens Advice is calling for one-off or time-limited financial support for arrears built up because of coronavirus, with the cost of relief shared fairly between government, creditors, and individuals. They add that this should be tailored to each sector but could include grants, payment matching or government-backed loans.
Dame Gillian Guy, Chief Executive of Citizens Advice, said: “As the government takes steps to try to kickstart the economy, it must not forget the millions who’ve fallen into debt because of a crisis no-one could have foreseen.
“Protections put in place by the government, businesses and regulators have staved off the worst consequences of lockdown debt – so far. But with these measures beginning to end, millions will now face the repercussions.
“It is not right that people who’ve followed government guidance by shielding, stayed at home to care for others, been forced to work less, or lost their jobs altogether should be the ones left facing a financial black hole.
“Government and businesses must help them now. Financial support for those who’ve fallen into debt must be prioritised to free them from the damaging consequences of long-term debt, and help strengthen the economic recovery.”
Commeting on the findings of Citizens Advice’s research, SNP MP Neil Gray said: “These findings are another stark warning that the UK government must urgently bring forward a comprehensive financial support package, strengthen welfare protections and extend the furlough scheme into 2021.
“With many households witnessing a loss in income or job losses, it is clear that stronger and extended support measures are desperately needed to prevent people taking on unmanageable levels of debt, rising unemployment, and to ensure a strong economic recovery.
“While the support brought forward by the UK government so far has been welcome, there are still serious hurdles – including DWP pushing people towards debt with Universal Credit advance payments.
“They must heed our calls and introduce non-repayable grants instead of loans at the start of Universal Credit claims to prevent more people falling into hardship.
“It is now critical that the UK government commits to maintaining access to the furlough scheme for as long as is required across each of the devolved nations, invests to stimulate economic growth and boost jobs, considers piloting a Universal Basic Income, and explores measures to alleviate the financial burden facing households – including an emergency basic payment, an Emergency Coronavirus Energy Grant, a six-month reprieve on utilities being cut off, and a freeze on prices.”
Update: The UK government has extended the evictions ban in England and Wales until the 20th September.
Responding to the U-turn, Dame Gillian Guy said: “We’re really pleased the government has stepped in to keep its promise that no renter will lose their home because of the coronavirus pandemic – for now at least.
“During this extended pause on new eviction proceedings, we hope the government will work with Citizens Advice and others to put in place a series of protections which will help those who’ve built up rent arrears get back on their feet.
“We’d like to see funding for a dedicated set of protections, including measures such as grants for those in arrears due to coronavirus.
“This would not only directly help those affected, but also contribute towards consumer confidence and the economic recovery.”