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No economic bounce back for millions of UK households

As the UK charts uncertain economic waves, the unprecedented state support has acted as a safe harbour, protecting British families’ incomes through the lockdowns. However, this may be breached as a planned cut to the Universal Credit top-ups in April will affect 6 million UK households. As it coincides with the end of the furlough scheme, the cut will push many families into poverty, warns Resolution Foundation.

With growing numbers of insolvencies and the biggest year-on-year rise in poverty since the 1980s, can our economic course be corrected before many families hit the rocks?

Economic outlook

Britain’s economy shrank in November as it went into a new lockdown; however, the dip of 2.6% was smaller than expected. With the rollout of the vaccination program, the economy is expected to bounce back. Yet, it may not feed into Briton’s wallets, especially to those with lower income.

Growing demand for Debt Relief Orders

The demand for debt advice is to increase by up to 60% by the end of 2021. With a growing number of Brits struggling with problem debt, the Insolvency Service proposes extending the eligibility criteria for DROs.

The changes would:

  • increase the total amount of debt allowable to £30,000 (from £20,000),
  • double the value of assets owned by the individual (from £1,000 to £2,000),
  • increase the level of surplus income to £100, up from £50 per month.

It will help vulnerable households to escape the debt trap. But, in order for them to rebuild finances, more support will be needed.

All debt problems are solvable

Whatever your debt problem, whether a failing business or individual debts, advice and help is always available and it is vital that it is sought as early as possible. Contact us today for a free initial consultation.

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