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Home / Business News / Coronavirus drags 2 million more UK adults into financial troubles

Coronavirus drags 2 million more UK adults into financial troubles

The poll of 7,000 people by the FCA in July found 31 per cent of UK adults have suffered a decrease in income during the pandemic,and that percentage is higher for young and non-white people

business Updated: Oct 22, 2020, 15:23 IST
Bloomberg| Posted by Ayshee Bhaduri
Bloomberg| Posted by Ayshee Bhaduri
London
Tightened local rules on social gatherings have come into force in recent weeks, affecting millions of people in areas including London, Liverpool and Manchester,and particularly those working in hospitality
Tightened local rules on social gatherings have come into force in recent weeks, affecting millions of people in areas including London, Liverpool and Manchester,and particularly those working in hospitality(REUTERS)

The pandemic means 2 million more British adults may be struggling to pay the bills, and British regulators want banks to help them.

A Financial Conduct Authority(FCA) survey estimates that shuttered restaurants and empty offices pushed the total number of adults facing financial hardship to 12 million in July, up from 10 million in February.

British borrowers struggling under months of Covid-19 restrictions should still have access to financial help when support measures including interest free overdrafts and payment freezes end Oct. 31, the UK watchdog said Thursday.

The poll of 7,000 people by the FCA in July found 31 per cent of UK adults have suffered a decrease in income during the pandemic, and that percentage is higher for young and non-white people. About 37 per cent of Black and ethnic minority Britons reported a hit to their income, according to the survey.

Tightened local rules on social gatherings have come into force in recent weeks, affecting millions of people in areas including London, Liverpool and Manchester and particularly those working in hospitality. The government’s furlough program is due to be replaced by narrower job support measures at the end of the month.

Banks should consider measures such as suspending or reducing further interest and payments on mortgages for instance, while being clear that it could affect a customer’s future access to credit, the FCA said.

Bank lobby group UK Finance said the industry is committed to providing support to customers facing financial difficulty. It noted in a statement that 4.4 million payment deferrals on mortgages, credit cards, and personal loans were granted since the start of the pandemic, with 323,700 of those still in place.

The UK government pushed banks to keep lending as the pandemic hammered the economy. Some programs, such as the Bounce Back loans for small companies, could face losses running into billions of pounds.

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