Research from the charity found that nearly a quarter (23%) of the 1.6m people who’ve accessed credit payment deferrals have subsequently missed repayments, while half (50%) say they have resumed repayments but with difficulty.

The last chance to apply for payment holidays on mortgages and other types of credit was 31 March. Yet StepChange is warning that millions are still struggling financially, while redundancies and unemployment are looming.

A report by the charity titled Stormy Weather found that nearly 80% of those whose income has been hit by Covid have not recovered financially.

The charity estimates that more than 14 million people have suffered a hit to their income which has affected their ability to pay for essential costs since March 2020. As of January this year, 11 million of those affected said they were still struggling to meet those costs.

The research highlights how the pandemic has exhausted coping strategies and eroded financial resilience, increasing people’s likelihood of falling into problem debt.

StepChange estimates £25bn of arrears and borrowing directly attributable to Covid has been built up since March 2020, with 10.6 million people having borrowed to make ends meet. About 2.8 million people have used high-cost credit to make ends meet in this period.

With traditional coping strategies and reliance on emergency measures worn to the bone, many people have had to resort to more extreme alternatives to get by. One in five of those who’ve suffered a hit to their income due to Covid say they or their children have experienced hardship, including skipping meals, rationing utilities or going without appropriate clothing for the weather since the beginning of the pandemic.

StepChange is calling on the government and regulators to put in place measures to support households to make ends meet, provide ways to address arrears and debt affordably, and protect those who are threatened with enforcement action.

StepChange has called for protection for tenants against eviction and a package of grants and interest-free loans to help people address rent arrears safely.

The charity is also calling on the government to extend the £20 per week uplift to Universal Credit beyond September this year. It also wants the government to amend council tax regulations to require councils to put in place affordable repayment plans for those experiencing difficulty before court and enforcement action are taken.

Phil Andrew, StepChange CEO, said: “As the country continues to try returning to normal, there are millions of households still struggling with covid debt for whom ‘normal’ is a distant dream. A year into the pandemic, many households’ coping mechanisms are exhausted and the temporary support measures that have kept them afloat are slowly being withdrawn. Without urgent action to shore up the finances of the millions struggling to meet essential costs, covid will cast a shadow over the economy for years to come.

“It is within the government and regulators’ gift to support those hit hardest by the pandemic, but it will require coherent, long-term planning and financial backing. By implementing measures including the creation of an emergency financial package for renters, a permanent £20 uplift to Universal Credit and new packages of targeted support to help people address covid-related arrears and debt affordably, we can reduce the risk of financial long covid for households across the country.”