Coronavirus brought many things into our lives, a lot of which we’ll feel the effects of for many years to come. One of those, and something which is of concern to many of us, is the huge number of people who are now in debt because of the pandemic. Without further intervention, hundreds of thousands of people face years of financial difficulty dealing with lockdown debts.

Recently, Citizens Advice estimated that 6 million UK adults have fallen behind on at least one household bill during the pandemic, including:

  • 3.4 million on their mobile phone or broadband bills
  • 3 million on their water bills
  • 2.8 million on their energy bills
  • 2.8 million on their council tax
  • 1.2 million on their rent1

3.9 million people have also fallen behind on either their credit card or overdraft repayments. This includes 3 million people who have fallen behind on their household bills at the same time.

They estimate that, in total, those households owe £1.6 billion in household bill arrears.

3.9 million people have fallen behind on either their credit card or overdraft repayments

To support this with up to date figures, research from leading savings site VoucherCodes.co.uk reveals how much debt the nation has accrued over the last year, and investigates the feelings surrounding people’s financial situations.

With the news that millions struggling with problem debts can now access a 60-day “breathing space” against prosecution and bailiffs from next week – this new research reveals the average Brit accrued £2,263 in debt (excluding mortgages) over the past year.

Over a third (36%) of people have worried about their money every day over the last year. For those that have borrowed money this year, a quarter say they’ve accumulated up to £1,000 in debt (23%), while 15% say they owe up to £2,000, rising to £3,000 for one in 10 people (10%).  

The data shows those aged 25-34 have built up the highest amount of debt since lockdown 1.0 began, at an average of £2,673 per person, suggesting that the financial impact of Covid has been felt most strongly by this age group. At the other end of the scale, those over 55 accrued on average £1,777 of debt – the lowest build-up of any age group and almost £1,000 less than millennials. 

  • Millennials built up the most debt since 23 March 2020 at an average of £2,673 
  • More than a third of Brits (36%) have worried about finances every day since the start of lockdown 
  • Personal debt is estimated to stand at £6,338 excluding mortgages 
  • More than one in ten Brits will see their debt level increase before lockdown ends on 21June (12%) 

Total personal debt in the UK is now estimated to sit at £6,338 per person on average, excluding mortgages. Interestingly, the study reveals that women currently owe an average of £5,852 – almost £1,000 less than the average man (£6,854).  

Across the country, findings show that over half (52%) of residents in Cardiff are currently in debt, the highest in the UK. Manchester and London follow closely behind with 48% and 45% respectively. On the other end of the scale are Brighton, Norwich and Plymouth, in which just 34% of residents admit to currently being in debt. 

Over half of residents in Cardiff are currently in debt

Now Britain’s roadmap out of lockdown has been revealed, many are looking forward to restrictions easing over the coming months, however this study reveals others are worried about the financial implications this will bring. Over a third of people (34%) feel anxious about life returning to ‘normal’ from a financial point of view, as lockdown has meant less of a need to budget. People are also nervous about their total debt levels when lockdown ends as one in 10 even predict that their debt will increase further before the end of lockdown (12%).  

Anita Naik is Lifestyle Editor at  VoucherCodes she told us………..

“A year on from the first national lockdown, this research proves just how much of an impact the pandemic has had on our finances and our concerns around money. It’s particularly worrying to learn that more than a third of us have had anxieties about finances every day this year.”

Anita Naik

“With many of us feeling daunted about managing money after lockdown, now is the perfect time to put in place some simple habits that will help keep your finances in order. These are my top three tips: 

1.       Regardless of your financial situation, it’s always worth shopping around to find the best deals on the things you need to buy. Installing a free browser extension such as DealFinder from VoucherCodes will make this really easy as it automatically finds and applies the best discount codes available – a quick and simple way to make sure you get the most out of your money every day.  

2.       Many banking apps now allow you to set spending limits to help you keep a secure grasp on your monthly spending throughout the month – so if you’re particularly bad at budgeting this simple feature will make sure you don’t overspend. You can also set up account balance alerts, so if you’re getting close to going overdrawn you’ll get a notification to ensure you can take action. 

3.       If you are able to, setting up a direct debit to your savings account will help ensure you keep some money back for things you really need – it’s often helpful to do this at the start of the month so you don’t end up spending it by accident. Many of us really struggle to save, but even as little as a few pounds each week will add up.” 

If you are concerned about mounting debt and need advice, support and information, Citizens Advice Wales is a great place to start. It’s always difficult to talk about any mounting debt, but as C.A. will tell you, talking is always preferable to hiding away from the problem. If you like more details, take a loot at their site HERE.

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