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We urge people to get debt advice as covid rules change
June 24, 2020
Citizens Advice County Durham warns of financial “cliff edge” and urges people to get debt advice as COVID rules change
15th June 2020
Local charity Citizens Advice County Durham says trends in changing advice needs could indicate households in the North East teetering on the edge of financial disaster – just when financial safety nets for their employers are starting to shrink.
Since 10th June, the current version of the Government’s ‘furlough’ Job Retention Scheme has stopped taking new applicants. New rules coming soon will increase pressure on some struggling businesses to contribute more to furlough wages, or risk making more staff redundant in order to survive.
Pressure for business to re-open after months without trading also means staff feel pressured to return to work, even if they are still ‘shielding’ from Coronavirus or required to stay at home by the NHS Test & Trace service.
Meanwhile, Citizens Advice County Durham has seen advice cases about employment problems double, while debt cases have fallen every month since lockdown started – a strange trend during tough times.
Research & Campaigns Officer Lewis Kirkbride explains: “Temporary rules meant that landlords, councils, lenders and energy and telecoms companies couldn’t take harsh actions against people who fell behind on their payments during Coronavirus; but these rules won’t last forever.
“If they start collecting repayments again at the same time as more and more people are losing their jobs, we could see spiralling debts and hardships – and even evictions. It’s really important to get debt advice now, and use the financial breathing room available right now to catch up a bit, if you can.”
“We’ve seen fewer people asking us for help accessing Foodbanks, which reflects the increase in temporary support available in their community; but if this means people are using help without seeking debt advice, there could still be a backlash from their growing debts when things change again. It’s understandable to use some financial breathing room to pay for their shopping, but we can help people plan ahead too.”
These worrisome trends have emerged after Citizens Advice revealed on 1st May that nationally, 2.6million renters have missed or expect to miss payments, 7.2million will be behind on Council Tax payments, and 7.4million will be behind on mobile phone and broadband payments.
Lewis continued: “I don’t think we’ve seen the worst yet. Employers are clinging on for dear life; but the longer Coronavirus lasts, the less cash they’ll have.
“Redundancies and closures look likely, so it’s absolutely critical that the Government gets things right: if the timing and the balance between removing the safety nets and restarting debt repayments is wrong, a lot of households in the North East are going to fall off a financial cliff edge when the rules change. Our stats suggest this could happen to people who never needed advice before.”
Citizens Advice nationally has called for fairness, and a range of measures that give self-employed people and those who are shielding more access to grants and furlough – which can only be arranged at employers’ discretion.
Go to www.citizensadvice.org.uk for information about Employment rights and Coronavirus rules, or speak to your local Citizens Advice charity – residents of County Durham can call Citizens Advice County Durham on 0300 330 9027 where there is also a specialist debt team on 0300 323 2000.
Anyone at risk of redundancy can call Citizens Advice’s Help to Claim Team on 0800 144 8444 to check their eligibility for Universal Credit and avoid the pitfalls of uneven incomes affecting their payments.
Notes to editor:
- Citizens Advice County Durham is an independent local charity giving free, impartial and confidential advice
- Research & Campaigns is one of CACD’s twin aims, and places CACD uniquely to spot emerging problems and trends across sectors, gathering intelligence at community level on the impact of policies and practices – call Lewis on 07824 905286
- CACD is currently giving in-depth advice by telephone while Coronavirus safety measures are in place – no face-to-face services are currently open in accordance with public health guidance
- Outside County Durham, there are separate local Citizens Advice charities in all parts of the North East and Cumbria