Dragged down by debt: millions of low-income households pulled under by arrears while living costs rise

Summary

This new research highlights that low-income households, who have borne the financial brunt of the pandemic so far, are also being dragged down by debt as we look to our economic recovery.

We find that 3.8 million low-income households across the UK are in arrears, and 4.4 million have had to take on new or increased borrowing through the pandemic. Many of these households weren’t in arrears before the pandemic, and have faced income loss and increases in their expenses.

We are calling on the Government to do the right thing and release these households from the burden of arrears by reinstating the Universal Credit lifeline, providing grant funding for targeted debt relief, and addressing key drivers of debt through system reform.