Millennials face coronavirus crisis cliff edge
Millions of millennials face a coronavirus cliff edge when the lockdown is lifted and we can return to work.
New research from the charity Citizens Advice found that more than 13 million people are already in dire financial straits, due to the crisis.
The study found that millions of people are already unable to pay, or expecting to be unable to pay, at least one bill because of the pandemic.
Of these, close to 11 million people have missed or expect to miss paying a bill that would leave them vulnerable to severe consequences when current government protections end.
These consequences include eviction, bailiff enforcement or disconnection.
Within some sectors of the economy, frameworks are already in place for helping people out of debt in a sustainable way.
Other areas, including the private rental sector and local authorities, do not have these frameworks in place.
Coronavirus crisis cliff edge
The research identified those most vulnerable to the risk of severe financial consequences once the lockdown is lifted.
One particularly vulnerable group are the 2.6 million private renters who have already missed a rent payment or expect to miss a payment owing to coronavirus.
Once the government’s pause on possession action ends on 25th June, this group of private renters face the risk of eviction and possible homelessness.
Another vulnerable group are the 7.2 million people who have missed or expect to miss a council tax payment.
Face-to-face bailiff recovery is currently suspended during the lockdown, but a build-up of arrears could lead to heavy-handed enforcement action from cash-strapped local authorities.
The 7.4 million people who have missed or expect to miss a mobile phone or broadband payment are also vulnerable.
Telephone providers have put measures in place to support customers during the lockdown, but this group could become vulnerable to disconnection once the lockdown is lifted.
According to the research, those facing the greatest health risk from coronavirus are three times more likely to have fallen behind on a bill.
This group includes those in the government’s ‘increased risk’ or ‘extremely vulnerable’ categories.
People in insecure work are also more likely to have fallen behind on a bill. This group includes agency works and those on zero-hours contracts.
Those in insecure work are three times as likely to have missed a bill payment as other workers.
Millennials are also at risk of falling off the coronavirus crisis cliff edge when the lockdown is lifted, with under 40s four times as likely to have fallen behind on a bill than those over 40.
Lucretia Thomas, a project advisor at Citizens Advice Enfield, said:
This pandemic has had a devastating effect on households. Many families that we see are in insecure employment and have lost income during the lockdown.
They’re telling us that their household expenses have increased as they stay at home to reduce the spread of Covid-19.
While rent still has to be paid, we’re seeing landlords insisting that arrears are cleared quickly and threatening tenants with eviction. People are concerned about how they will reduce their arrears to prevent eviction after this crisis has passed.
Renters should be protected from harassment by their landlords or agents, and have a roof over their heads during this challenging time and beyond.
Dame Gillian Guy, Chief Executive of Citizens Advice, said:
The government’s comprehensive measures have, for now, eased the financial burden for lots of households across the country. But millions still have reason to fear the looming financial cliff edge when these protections end.
No one should lose their home, or have bailiffs chasing council tax payments, because of debts built up during the pandemic. Just as the lockdown restrictions will need to be eased gradually to prevent a second wave of the virus, we also need a transition out of the financial protections to avoid a new wave of hardship.
The government must take strong action to prevent millions going over the financial cliff edge, ensure people are helped out of debt and so support the economic recovery.
To help deal with those facing a coronavirus crisis cliff edge, the charity is urging the government to extend current protections and shield the most vulnerable from punitive enforcement.
Citizens Advice would like to see tenants in the private sector protected by the government fast-tracking the abolition of Section 21 ‘no-fault’ evictions, as well as making the mandatory ‘rent arrears’ grounds for eviction discretionary.
The charity also wants the government to take measures to ensure private renters are given the opportunity to make up any payments they miss as a result of coronavirus.
For council tax debts, Citizens Advice would like the government to provide local authorities with sufficient financial support to offer payment holidays for people struggling to pay their bills.
This would mean councils could still afford vital services while not adding further pressure to residents affected by Covid-19.
For telecoms customers, the Department for Digital, Culture, Media and Sport and Ofcom should take action to make sure that the current voluntary protections are continued after the lockdown ends and ensure no one is disconnected because of bills built up during lockdown.