Insolvency practice Creditfix has urged the private, public and third sectors to create a taskforce to help the millions of people facing debt issues due to Covid-19.
With its sister company in Scotland, Carrington Dean, the firm analysed 22,5000 of its UK clients to produce its Covid-19 Debt Analysis: Insight and Trends report.
The research revealed a sharp rise in the number of people on higher incomes seeking debt arrangements which would protect assets such as their homes and cars.
The number of clients entering a debt solution with a combined income and assets of £55,500 or more, rose by 30 per cent from September to April last year to the same period this year.
During the second and third quarters there was also a 20 per cent year-on-year rise in the debt owed by self-employed people.
Therefore, Paul Mason, chief executive officer of Creditfix and Carrington Dean’s parent firm, Finbora Group, said collaboration is needed to create a taskforce to help people facing Covid-19 induced debt issues.
“The uncertainty that Covid-19 has spawned in socio-economic terms presents a real, tangible threat to how people will adapt financially to the yet to be fully realised fallout of the pandemic,” Mason said.
“This crucially includes their health, welfare and well-being.
“There is also a heightened concern about how front-line public and third sector services will manage, with the virus having already taken a heavy toll on resources.
“This could be stretched to the ultimate limits as they deal with fluctuating levels of new cases and consequently have a knock-on effect on other support services.
“As a result, it is fundamental that there is more cohesion between the private, public and private sector and a taskforce is pivotal to putting joined-up contingency plans in place to ensure people get support as and when they need it.
“From debt advice to networks of third-party support, the private sector is well positioned to act as a buttress for the public sector.”
The Creditfix report cited figures from a YouGov survey which showed 32 per cent of people were more worried about the effect of the pandemic on their income than losing a loved one (30 per cent).
The poll also found that more than 20 per cent were concerned about losing their job and not being able to find work.
“The coming months are likely to be more telling with the end of the furlough scheme and unpredictable restriction measures, combined with winter and temptations to overcompensate at Christmas, among key factors,” Mason said.
“There are serious concerns about how long the financial uncertainty can be sustained and the repercussions this may have on people and families across the nation.”