You are here: Home - Credit Cards & Loans -

Furloughed workers forced to take out loans to survive pandemic

0
Written by:
28/09/2021
People on furlough have had to turn to credit cards, borrowed from family and friends, or even remortgaged their home during the pandemic, research shows.

A survey by Canada Life found 44 per cent of furloughed workers have borrowed money on credit cards or considered doing so to boost their income.

Some 42 per cent have borrowed or considered borrowing from family and friends and 41 per cent have or have considered taking out personal loans.

More than a third (34 per cent) have remortgaged or have considered remortgaging their property to unlock additional income. Younger workers are most likely to have remortgaged, with 49 per cent of 18–34-year-olds having considered it or done so, compared to 36 per cent of 35–54-year-olds, and just 5 per cent of those aged 55 and over.

The government’s furlough scheme – formally called the Coronavirus Job Retention Scheme – is due to be wound up on 30 September. It protected millions of jobs during the pandemic.

However, there are fears the end of the scheme could lead to job losses and higher household debt.

The number of people furloughed stood at 1.6 million as of 31 July – down 340,000 from almost two million at the end of June and a peak of nearly nine million at the height of the pandemic in May last year.

Alice Watson, head of marketing, insurance at Canada Life, said: “The furlough scheme has provided much-needed support to millions of workers across the country. However, with fragile finances, many have had to consider other sources of income to boost their incomes, whether that be turning to friends and family, looking at forms of credit or accessing the wealth from property.

“As we navigate through the pandemic, it is likely many people will feel additional financial strain as the furlough scheme draws to close this month.

“Property wealth is playing an increasingly important role in financial plans. Anyone considering accessing their property wealth should speak to a financial adviser, whether that be remortgaging or equity release.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

How your monthly bills could rise as the base rate reaches 1.25%

The Bank of England has raised the base rate to 1.25% as predicted – the fifth consecutive rise in just six ...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week