Five things we learned from our clients about the pandemic

By Josie Warner, Senior Research and Insight Officer

StepChange Debt Charity
StepChange Debt Charity


On Wednesday we released our latest research report which explored the experience of our clients who first sought debt advice during the initial seven months of the pandemic. The report uses debt advice data to highlight changes to the debt and demographic profiles of our clients between April and October 2020.

Advice client data was supplemented by an online survey to better understand how the experiences of those struggling with debt during the pandemic and impacts on their wellbeing and mental health. Many clients told their stories of the challenges they have faced. There were a number of key takeaways from this report:

1) Many clients had experienced income shocks

As highlighted in our recent polling, many households across the UK have faced income shocks such as unemployment or redundancy, a reduction in pay through the furlough scheme or a reduction in work hours during the pandemic. While Government support and forbearance measures put in place by regulators have provided respite, for many, these safety nets have not been sufficient to prevent financial difficulty and problem debt.

Our clients are among the hardest hit by the economic impacts of the pandemic. Almost half (46%) of clients who had experienced an income fall said they had either been made unemployed or redundant. A quarter of new clients who had experienced an income shock had been furloughed with a reduction in salary. Although furlough payments have provided some form of respite, for many the 20% reduction in pay had a significant effect on their ability to make ends meet:

“I lost out on a lot of money over 5 months of being furloughed, with only receiving 80% pay each month. It was really hard to pay everything as well as provide.”

2) A growing proportion of clients had fallen behind on priority bills

In April 2020, the proportion of clients in arrears fell below levels found in 2019, but these have since significantly increased. We saw large increases in the proportion of clients with arrears on council tax payments, up from 20% in April to 29% in October, and rent arrears, up from 17% in April to 20% in October.

Arrears on utilities bills have also increased among new clients at an alarming rate. The proportion of clients behind on gas, electricity and water were significantly higher in October 2020, than pre-pandemic levels in 2019.

3) Pre-pandemic ‘debt vulnerable’ demographic groups continue to be hardest hit

Between April and October, our client population continued to be over-represented by women, those from younger age groups, single parents and renters.

“My situation was already getting bad since the end of last year, they started cutting hours. When covid arrived, my salary fell by half, I couldn’t pay my rent and bills, and I started using the bank’s card limit and overdraft, and it became a snowball.”

For example, this report finds that 60% of new clients were women, and 83% were renters. Previous research from us highlights that these groups often have poor financial resilience to income shocks, and the impacts of the pandemic appears to be no exception.

“My record was 10 days without a meal. To ensure the kids could eat meals, I ate bread or 11p noodles”

4) The financial impact of the pandemic is harming wellbeing and mental health

Our research and that of others has previously highlighted the negative impact of debt on mental health, a trend which has continued and perhaps worsened throughout the pandemic.

“We tend to try and make ends meet, the mood is low in the house and some stress has kicked in. Been to doctors for medication for depression, both my wife and myself, so not the best of situations.”

Our survey data found that two thirds (66%) of new clients reported struggling with anxiety and 62% reported experiencing depression. Clients told us about a range of issues which were affecting them during these difficult months, including the difficulty of their overall financial situation, finding new work and trying to manage on very low budgets:

“[Covid-19] caused me to feel isolated and depressed and constantly worrying about money while applying for numerous jobs and getting turned down all the time. It’s demoralising.”

5) Clients relied on Universal Credit, family and friends, food banks and credit to cope

Universal Credit has been an important source of support during the pandemic. The proportion of telephony clients in receipt of Universal Credit rose from 34% to 44% between April and October this year. Despite the £20 uplift, clients told us that the payments they received simply were not enough:

“Trying to pay for anything is a nightmare, never been unemployed it’s a shock how little you have to live on.”

Many clients also turned to borrowing to meet essential day to day costs, most often through credit cards and overdrafts.

Friends and family were also an important source of support for many during this difficult time. However, some told us that they were being asked to pay back money that they had previously borrowed as their friends and family were now facing financial difficulty:

“As many of my family and friends lost their jobs and they were financially weak… they have started asking for money they gave me earlier.”

Savings, foodbanks or receiving financial support from their local authorities, were also commonly used means of coping with the economic impacts of the pandemic

No instant bounceback in sight

The data in this report shows the difficult choices and situations that our clients have experienced due to the pandemic. Some clients have found themselves in problem debt for the first time, and for others, the pandemic has made their existing financial difficulty far worse.

However, the data and stories shared by our clients show just a small part of the picture. Our clients are those who have already been negatively impacted, and for many of these clients the impacts are likely to be long term.

Our recent polling estimates that more than 15 million adults have faced an income shock due to the pandemic. Unless there are changes in the wider economic landscape, many more people are likely to experience financial difficulty. That’s why it’s vital that the right support mechanisms are in place.



StepChange Debt Charity
StepChange Debt Charity

We provide free, impartial debt advice and solutions to anyone struggling with debt problems in the UK.