For more information contact Joe Cox on 07796884487
New analysis by Jubilee Debt Campaign has found that the number of households struggling with a heavy debt burden increased by a third in 2021.
According to the analysis of the Bank of England’s household survey, the percentage of households reporting that loan and interest payments were a heavy financial burden increased by 35% from 7.19% to 9.68% [1]. This suggests an extra 1.3 million adults fell into financial hardship in 2021 [2].
Households also reported that their average monthly loan repayments hit a record £373 in 2021, up 22% on the year before and the highest figure for at least a decade. [3]
The survey was conducted before Universal Credit was cut by £20 in October last year, the Omicron wave and the recent surge in the cost of living. Real wages and benefits, after inflation is taken into account, are currently declining in the UK [4] and millions of low-income households are being forced to borrow or go without essentials such as food and heating [5].
Dean Burn, aged 62 from Manchester, worked for 41 years before losing his job during the pandemic said:
“I’m always juggling debts – this month I got my TV license bill, so I’ve been unable to pay back my housing benefit over-payment.
I’ve relied on food banks these past 12 months to get by and I can’t afford to even pay for the bus sometimes. I’ve been keeping just one light on in the house at a time and I’m now worried about being able to afford to heat my home.”
Joe Cox, Senior Policy Officer at Jubilee Debt Campaign, said:
“The problem of household indebtedness is growing at an alarming rate. Millions of UK households never recovered economically from the pandemic and the latest cost of living scandal threatens to push people who are already living on the edge further into debt and poverty.
“Ignoring this problem won’t make it go away. Instead, we need urgent action to alleviate the crushing pressures on British households by writing-down large amounts of problem debt and widening access to insolvency solutions.”
Notes
The Jubilee Debt Campaign is a UK charity working to end poverty caused by unjust debt through education, research and campaigning: https://www.jubileedebt.org.uk
[1] Jubilee Debt Campaign calculations derived from the Bank of England/NMG survey, fieldwork conducted in September 2021. https://www.bankofengland.co.uk/statistics/research-datasets
[2] Based on Office for National Statistics mid-year population estimates of the UK adult population (20+) of 51,422,697 https://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/populationestimates/datasets/populationestimatesforukenglandandwalesscotlandandnorthernireland
[3] Jubilee Debt Campaign calculations derived from the Bank of England/NMG survey, fieldwork conducted in September 2021. https://www.bankofengland.co.uk/statistics/research-datasets
[4] According to the Office for National Statistics in real terms (adjusted for inflation), from October to December 2021, total and regular pay fell on the year at negative 0.1% for total pay and negative 0.8% for regular pay. https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/averageweeklyearningsingreatbritain/february2022
[5] The Dragged Down by Debt report by the Joseph Rowntree Foundation found in October 2021 that 3.8 million low-income households across the UK are in arrears, and 4.4 million had to take on new or increased borrowing through the pandemic. https://www.jrf.org.uk/report/dragged-down-debt-millions-low-income-households-pulled-under-arrears-while-living-costs-rise