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18 November, 2020 Open access

Young people, ethnic minorites and renters most at risk of debt caused by coronavirus pandemic, says IPPR

New report calls for urgent action to address financial impact of pandemic and longer-term action to prevent problem debt, including technological innovation and access to affordable credit

Young people, people from ethnic minority communities and renters are most at risk of debt caused by the coronavirus (COVID-19) pandemic, according to a new report from the Institute for Public Policy Research (IPPR).

In Helping households in debt, published today, IPPR examines how the financial impacts of COVID-19 may affect people in different demographic groups and regions and explores experiences of debt and household finance before and during the pandemic.

Drawing on data from a regular survey of UK households and a special survey carried out soon after the first peak of the pandemic, IPPR's findings include that -

In relation to the regional effect of COVID-19, IPPR finds that higher pre-pandemic debt levels, coupled with low average incomes and tough local restrictions, mean that people in the North East and East Midlands are most at risk of problem debt, while people in London are more likely than people in other areas to report struggling financially and being behind on bills before the crisis - potentially linked to higher housing costs - but have relatively low consumer debt levels.

IPPR goes on to recommend urgent action to address the impact of the pandemic on household debt, as well as long-term action to prevent problem debt occurring, including -

Commenting on the report, IPPR North Senior Research Fellow Anna Round said -

'Too many people found it hard to make ends meet before COVID-19 - the pandemic will make their lives even more difficult and push people into debt who were only just managing before. We need support in the short-term to make sure that households and local economies don’t bear the brunt of problem debt as a result of COVID-19, and long-term action to prevent problem debt - including technological innovation and access to affordable credit.'

For more information, see Winter Covid debt warning: young people, ethnic minorities, and renters at most financial risk from ippr.org