The UK’s debt and money advice sector has been preparing itself for unprecedented demand amid the widespread economic implications of the Coronavirus ‘lockdown’. Organisations have been quick to adapt to the ever-changing circumstances to ensure that advice and support can continue for those who still need it most, and that help is there for those experiencing financial issues as a direct result of the pandemic.
However, as has been highlighted at the Money Advice Liaison Group’s (MALG) new weekly virtual ‘Members Friday Forums’, advice organisations are not yet being flooded with new enquiries as was predicted. Much like many areas of the NHS where the capacity is there to treat patients with ailments other than Covid-19, those facing increased financial difficulty are holding back in coming forward for help until the peak of the pandemic is over. This has prompted many to raise concerns that there is pent up demand and that these vital services will be inundated when the ‘aftershocks’ of the current crisis begin to emerge.
MALG brings together organisations and professionals from across the money and debt landscape to ‘work together to improve the lives of people in debt’. With no regulatory, commercial or political agenda, members can candidly discuss and debate issues to find joined-up solutions to economic and social problems. When looking at the whole picture of temporary Government support packages, regulatory changes and forbearance; the wider economic impact; and the short and long term implications for individual households, some fear that this is the ‘calm before the storm’ for the money advice sector.
Research shows that people who get into financial difficulty often wait far too long to seek help and many organisations have been campaigning for years to break down taboos around debt and personal finances and educate people that ‘prevention is better than the cure’. Now more than ever it is vital that people get help with their personal finances before they reach crisis point.
Creditors, collections and enforcement agencies, advisers and others must work together to ensure that consumers are encouraged to seek help with managing their finances in this new economic landscape sooner rather than later. Government, policy makers and regulators must also focus on the prevention rather than the cure of the longer term impact of the crisis on household finances.