“According to StepChange’s, annual Statistical Yearbook for 2020, around 500,000 new people contacted them for help last year, with unemployment or redundancy, reduced income or benefits, and lack of control over finances cited as the main reasons for people’s problem debt.
The number of new clients is lower than that of the previous year, but the charity has seen growing levels of personal debt or financial difficulty for households in 2020 and a shift of clients requiring emergency support rather than long term support and solutions.
“We know that the pandemic has impacted people’s finances differently, and it’s been a very challenging time for many, with almost 20 million UK adults* experiencing a financial shock of some kind as a result of the pandemic.
In order to guard against potential financial shocks our research found one in seven (15%) put money aside in a rainy-day fund. However, the challenge becomes clear when looking at Yolt’s own user data, with intentions to save at their peak right after payday and with deposits into saving accounts at their highest in the 4th and 5th weeks of the month on average. However, savings withdrawals peak in week two and week four of the month, indicating that some are dipping back into their savings throughout the month to get by.
“Although understandably, the current climate is difficult for people managing their money, it’s important we take steps towards positive change where possible. Knowing what you have coming in each month, and reviewing your spending and regular outgoings, so you can budget for the weeks or months ahead.
For many the true financial pinch may not have been fully felt yet, with some incomes having been propped up by the Government’s various initiatives, such as the furlough scheme.
Now, perhaps more than ever, is a time for people to be engaging with their finances, using digital tools and services to help them spend smart, save where possible and identify areas where they may be able to cut back.”