51pc of UK adults got into debt in 2020
More than half of the population got into debt this year, with one in four stating that their debt was a direct result of the Covid-19 pandemic.
Meanwhile, one in ten people said that their new debt was directly caused by being put on furlough with a reduced income.
According to money.co.uk’s newly-created Coronavirus Debt Index, the average person in the UK owed £9,246 in debt in 2020. The average debt accrued by furloughed staff was estimated to be £1,050 per person.
“2020 has been a year like no other,” said Salman Haqqi, personal finance expert at money.co.uk. “And this has had a huge effect on the finances of everyday people, including debt and how they’ve managed it.
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“Our survey has shown that over 11 per cent of new debt in 2020 is down to workers being furloughed and having reduced incomes.
“Based on the fact that 9.4m UK jobs were furloughed throughout 2020, the cost of debt due to furlough is roughly £1,050 per furloughed employee – that’s £9.87bn of furlough debt incurred in the UK during 2020.”
Money.co.uk found that furloughed workers in the East of England have accrued the most new debt this year – with 16.13 per cent of all new debt attributed to reduced salaries during furlough.
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Norwich was the worst-affected city in the UK, with 20 per cent of all debt linked to furloughed workers on reduced salaries.
In London, 15.38 per cent of 2020 debt was blamed on the effects of furlough, and 14.15 per cent of the debt in Manchester was due to furloughed workers receiving a reduced salary.
Young people have been most affected by rising debt, with 36 per cent of 16-24 year-olds saying that they are taking debt into 2021 due to the Covid-19 pandemic.
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