People with prior credit blips have suffered greater financial upheaval than the general population as a result of the pandemic, a study by Pepper Money has found.

Research by the specialist mortgage lender found that 24% of the general population said their income has decreased in the last year as a result of COVID-19, while 36% of adults with adverse credit have seen a reduction to their income.

Twenty-nine per cent of the study’s respondents with adverse credit revealed that the main reason for a reduction in income was because they were furloughed. A further 16% said they received lower income via self-employment, while 16% revealed they had lost their job, 11% said their income was reduced by their employer.

With this reduction in income, Pepper Money stated that many people with adverse credit have relied more heavily on credit. The study found that almost a quarter (24%) of people with adverse credit said their use of credit has increased compared to 12 months ago, compared to 13% of the general population.

“We have already seen numerous reports highlighting the fact that the financial impact of the COVID pandemic has not been distributed evenly across the population, and our research shows that those people with adverse credit have suffered a greater upheaval in their finances than the general population,” said Pepper Money sales director, Paul Adams.

“However, this does not mean that this group of customers has to be excluded from the mortgage market.

“This commitment to financial inclusion is an important step in helping those who have been impacted financially by COVID to continue to pursue their life plans and goals. Brokers can help with this, by clearly communicating that they are able to help customers with adverse credit and have access to forward-thinking lenders with competitive products.”

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