Scots were 'financially vulnerable' before crisis

A quarter of Scots were showing at least one sign of financial vulnerability in 2019, before the effects of Coronavirus took hold, a debt charity has warned.

Scots were already struggling financially before the coronavirus crisis.
Scots were already struggling financially before the coronavirus crisis.

The most common reasons for debt among new clients of StepChange were a reduction in income or benefits, changes to employment and disability or illness, all three of which the charity said were “particularly concerning” given the threat coronavirus already poses to financially vulnerable households.

The charity said the current economic crisis also poses a threat to a new wave of previously financial stable households, who may find themselves in growing difficulty in the months ahead and warned that special support for these groups to allow them to recover will be needed as payment holidays and forbearance come to an end.

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StepChange has set up a hub for those worried about the effect of Covid-19 on their finances and is urging anyone who’s concerned they may be in difficulty to seek advice as soon as possible.

Sharon Bell, head of StepChange Scotland said: “These figures show that financial resilience was critically low before the outbreak of Covid-19, despite most of our clients coming from in-work households. An extremely concerning proportion of our clients were already struggling with essential bills like rent, mortgage and council tax.

“As the long-term economic impact of Covid-19 begins to take hold, there is a real danger many households’ finances will be overwhelmed.”

She added: “We need more signposting to free debt advice, as the earlier someone gets help the greater their options may be and the less harm they could experience. We welcome the steps the Scottish Government has been taking to date, but we also need policy makers across the UK to provide adequate support frameworks and affordable opportunities to build resilience so that more people can weather life shocks when they do happen.”

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