Evidence continues to emerge demonstrating the scale of the crunch on household finances and its likely consequences as the UK emerges from the pandemic, according to the March 2021 Money Statistics, produced by The Money Charity.
The March Budget brought welcome news of extended supports and measures, now lasting until September 2021, which will assist household’s finances as the UK moves onwards from a deeply challenging year. However, the picture of the sheer depth of issues which are forthcoming remains a concerning one.
Since March 2020, 11.1 million households have accumulated £25 billion in debt and arrears due to the pandemic, an average of £2,300 per affected household. 460,000 private sector renters were behind on their rent in January 2021, while 2.3 million people have fallen behind on their broadband bills, with internet connectivity having progressed from its previous perceived status as a luxury to an essential utility.
As in previous months, these numbers showing hardship stand alongside those indicators which show financial improvement for the households where members have stayed employed and saved money during the pandemic.
The average household savings rate was 16.5% in Q3 2020. Meanwhile outstanding credit card balances fell by 22.4% in the year to January 2021 and the average first-time buyer house price rose by 6.8% in the same period.
Michelle Highman, Chief Executive of The Money Charity says:
“While the extended support measures announced in the Budget are very welcome, increased debt levels and evidence of financial hardship suggest that new forms of creative support will be sorely needed in the year ahead.
“The numbers of those in difficulty are alarmingly large, in the hundreds of thousands if not millions, meaning that maintaining ‘business as usual’ support just won’t be sufficient. For the UK to continue developing its Financial Wellbeing, it is imperative that we avoid a household insolvency and eviction crisis, by ensuring that people are supported to keep their homes and incomes until the economy has had time to fully recover.”
Other striking numbers from the March Money Statistics:
- 7 in 10 Universal Credit claimants seeking advice from Citizens Advice had not previously made a benefits claim. (P4.1.)
- Net lending to individuals and housing associations in the UK grew by £76.8 million a day in January 2021. (P4.)
- Government debt increased by £789 million a day in the year to February 2021. (P4.)
Get the full picture and many more fascinating facts about money in the UK in our monthly Money Statistics.
Notes to Editors
- For over 25 years, The Money Charity has been the UK’s Financial Capability charity. We proactively provide education, information, advice and guidance to people of all ages, to reach our vision of seeing everyone achieving Financial Wellbeing by managing their money well. We empower people across the UK to develop the skills, knowledge, attitudes and behaviours to make the most of their money throughout their lives. Find out more at https://themoneycharity.org.uk/
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