A charity has warned that the debt is the “sleeping giant” of the problems created by the COVID-19 pandemic in the United Kingdom.
The consequences of the health crisis have already seen an increase in the number of people asking for help – whether 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 being accompanied by families who never dreamed they would find themselves in need of universal credit or unable to put enough food on the table.
The Freedom Community Project in Bolsover, north of Derbyshire, runs a food bank and financial advisory service. He saw a “distressing” increase in demand during the blockade.
Image: Janet Koszegi says she spoke to people who haven’t eaten in three days
Janet Koszegi, a food bank volunteer, told Sky News: “It is important that you are a professional when you are talking to people, but inside you are thinking ‘oh my God’.
“In the end, you need to look for someone and say ‘look this is quite distressing’, knowing that someone hasn’t eaten in three days, a family that hasn’t eaten in three days – that case happened recently.”
Calls to the project helpline quadrupled during the blockade to 2,000 per month.
Image: Freedom Community Project runs a food bank in Bolsover
Mark North, who runs the charity in the former mining area, told Sky News that debt levels are his biggest fear.
“I characterize it as the sleeping giant … it will wake up, it is starting to happen.”
He said he was concerned about those “in one of those roles who won’t get back to work so quickly” or who are “self-employed and trusting others who can come back to bite you before you can actually generate money to pay”.
“This is my fear that he is sleeping there, waiting, he will wake up and it will cause a big problem in our communities.”
Local resident Stuart Wishart, who was picking up food packages for a relative from the Freedom Community Project’s food bank, told Sky News: “There are people out there who don’t talk to anyone … They are ashamed to do so, ashamed of coming here.
“They think this is something … just borrow, borrow all the time.”
While some pay holidays will be extended, others will not, and the ban on face-to-face charges by bailiffs is due to end on August 23.
Dame Gillian Guy, Executive Director of Citizens Advice, said: “If 1.3 million households we estimate have missed a payment of city taxes or 2.6 million tenants who have lost or expect to miss a rental payment, it is likely to be serious consequences for people left behind in their accounts.
“The government took a bold step at the start of the outbreak to try to protect jobs and income. Now it is time for them to be equally bold in dealing with the impending UK personal debt crisis.”
The Money and Pensions Service said it expects a 60% increase in demand for debt advice by the end of 2021.