Household debt is increasing in the UK. The Covid-19 pandemic has created precisely the kind of shock that turns manageable debt into problem debt, and forces people to enter into debt, or increase their borrowing.
Across the UK, certain demographic groups are more vulnerable to financial difficulties as a result of the Covid-19 crisis. This includes people who were already worse off before Covid-19, showing another way in which the pandemic has deepened existing inequalities. We also found variations between UK regions in levels of pre-pandemic indebtedness and vulnerability to problem debt.
In this report, we examine how the financial impacts of Covid-19 may affect people in different demographic groups and regions and explore experiences of debt and household finance before and during the pandemic. Our recommendations focus on actions to mitigate the impacts of the pandemic and to help people manage their finances.
