Ethnic minorities most at risk of debt caused by coronavirus economic crisis, says IPPR

New analysis finds that black, Asian and other minority ethnic people are twice as likely to face difficulties paying bills in next three months compared to population as a whole

People from black, Asian and other minority ethnic communities are most at risk of financial problems and rising debt caused by the coronavirus (COVID-19) economic crisis, according to new analysis from the Institute for Public Policy Research (IPPR).

In research published today - as part of a wider project on the growth of indebtedness and problem debt whose full findings will be published later this year - IPPR finds that -

• people from black, Asian and other minority ethnic communities were more likely to face financial difficulties before the crisis - 12 to 18 per cent reported struggling, compared to 7 per cent across the population as a whole;
• among borrowers, those from black communities had the highest relative debt levels, with an average equivalent to 18 per cent of their annual gross income, compared to 12 per cent across all groups;
• among people from all minority ethnic groups who were employed or self-employed at the start of the year, 13 per cent were no longer working in June, compared to 5 per cent of the population generally;
• people from minority ethnic communities are more likely to rent their homes than the population as a whole - 44 per cent, compared to 28 per cent - with the accompanying risk of eviction for arrears of rent; and
• people from minority ethnic communities put their chances of not being able to pay their bills over the three months from June at 27 to 34 per cent on average, compared to 14 per cent across the population.

Commenting on the findings, IPPR Economist Shreya Nanda said -

'Without further intervention we are on course for a new debt crisis, from which black, Asian and other minority ethnic people are particularly at risk. Many in these communities are likely to experience financial difficulty in the months ahead, and to be vulnerable to eviction as a result of rent arrears. Such economic insecurity risks compounding the already disproportionate health impacts borne by people with minority ethnic backgrounds during this crisis - effectively a ‘double whammy’.'

For more information, see Ethnic minorities most at risk from debt as economic crisis creates Covid-19 ‘double whammy’ from ippr.org.uk