Around 6% of UK adults have missed some form of major payment over the last two years because of the pandemic’s impact on household finances, research from The Mortgage Lender has suggested.
This figure, based on a study among 2,002 people, would equate to around 3.2 million adults across the UK who have missed their usual payments, including on major expenses such as their rent, mortgage, or credit cards.
Four in 100 UK adults admitted to having missed multiple payments, representing a significant proportion of the population who’ve been financially squeezed throughout the pandemic and who may have fallen into adverse credit.
The Mortgage Lender suggested that young adults are more likely to have experienced financial difficulty during COVID, as the age group most affected by job instability. The research showed that over a tenth (11%) of 18 to 34-year-olds have missed at least one usual payment in the last two years, nearly four times the amount of over-55s (3%), while 6% of young adults also admitted to having missed multiple payments.
“The past two years have impacted many people’s jobs and salaries, putting a squeeze on household finances, and now with the rising cost of living due to high inflation and energy costs there is even greater pressure on the nation’s finances,” The Mortgage Lender’s CEO, Peter Beaumont, commented. “This can all lead an individual to miss a regular payment which then could have a knock-on effect on their access to credit down the line.
“In such a volatile economic climate, it’s important that more people are prevented from falling down a rabbit hole of financial difficulty. The lending market needs to become better equipped to deal with the greater quantities of people who are emerging from the pandemic with adverse credit histories.
“Rather than penalising people for the consequences of an unprecedented event, the industry should be working together to support those who’ve missed payments so that people, especially aspiring homeowners, aren’t locked out of the market.”
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