New research has found that 45.5% of people have been forced to take out some kind of financial facility or borrow money from friends/family due to the pandemic according to KIS Finance.
Alongside this, a further 43.2% of people expect to seek out more financial help before the end of the year. Young adults between 25 and 34 were the worst hit, with people in London also suffering more than the rest of the UK.
As well as asking consumers if they had to take out any credit due to the pandemic, the survey also found out what type of credit people are turning to in these troubling times.
Almost 50% of respondents were forced to take out credit due to COVID-19. Almost half the survey respondents admitted to taking out at least one form of credit as a direct result of the pandemic. Among the 45.5% of people that fell into this category, the types of credit looked like this:
- 25.8% went into an overdraft
- 15.5% took out an additional credit card
- 10.5% sought help from family or friends
- 7.7% used a personal loan
- 6.4% had to sell assets
- 5.2% took out a payday loan
The data suggests that short-term borrowing is the most popular amongst respondents, which raises a few concerns. Primarily, it may lead to many people ending up in large amounts of debt in the next few months.
When looking at the percentage of people in each age group that had to take out a form of credit, the survey discovered that 66.1% of 25-34 year-olds needed financial help. This was the highest figure, meaning young adults were hit the worst. Perhaps more worryingly, 66.7% of this age group also believe they’ll need more financial help by the end of the year.
The other age groups were as follows:
- 18-24: 49%
- 35-44: 63.6%
- 45-54: 38.7%
- 55-64: 23.6%
- 65+: 16%
The survey also looked at the percentage of people living in different cities around the UK. Unsurprisingly, people in London suffered far more than anyone else. A massive 61.3% of Londoners sought financial assistance due to the pandemic, with Manchester coming in second at 49.1%. Most of the other cities that suffered during the pandemic were in either Tier 2 or 3 before the second national lockdown. This suggests that the extra measures had more of a negative impact on the local economies.