London Daily

Focus on the big picture.
Sunday, Nov 09, 2025

Coronavirus crisis has intensified UK's wealth divide, data reveals

Coronavirus crisis has intensified UK's wealth divide, data reveals

12m adults struggling to pay bills, with BAME people worst hit, official figures show

Official figures have laid bare the huge financial divide in the UK caused by the coronavirus crisis, with one in three households experiencing income cuts, and young adults and black, Asian and minority ethnic people worst hit.

In a grim overview of the nation’s personal finances, the Financial Conduct Authority said 12 million adults were struggling to pay their bills, up by 2 million since coronavirus struck in February.

The financial regulator also found that 31% of UK households had experienced a decrease in income, with affected families typically having lost a quarter of their income.

Households from black and minority ethnic (BAME) backgrounds have suffered worst financially from the pandemic. The FCA found that 37% of BAME adults had taken an income hit, and were the most likely to have been forced into reduced working hours.

Young adults aged 25 to 34 – many of whom work in bars, restaurants and the arts and entertainment industry – have been the most likely to have had a change in employment as a result of the pandemic.

The FCA found that one in five young adults were now more likely to be seeking debt advice, compared with just one in 50 in the 55-64 age group.

As fresh coronavirus restrictions spread across the UK, Citizens Advice said millions of people were in a financially calamitous position. It called for improved government support and a continuation of the £20 a week uplift in universal credit beyond spring.

The chief executive of Citizens Advice, Dame Gillian Guy, said: “With the finances of 12 million people now fragile, there’s a real possibility that new lockdown restrictions will force many people into debt this winter. It’s in the government’s power to prevent this happening. By strengthening the support for those struggling with essential bills.”

The FCA said it had put in place a package of support to ensure banks helped struggling borrowers after 31 October, the cutoff date for the final applications under the coronavirus mortgage holiday scheme.

UK Finance, which represents Britain’s banks, said 4.4m payment deferrals of some sort – including personal loans, credit cards and mortgages – had been granted since the pandemic began, but only 323,700 were still in place.

Lenders had provided a total of 2.5m mortgage payment holidays, with 162,000 home buyers still on a payment deferral on 9 October, said UK Finance.

The banks said households struggling to meet their mortgage payments could choose from one of four options: extending the length of the mortgage term, switching to interest-only from repayment, deferring payment of the interest, or capitalising the interest and adding it to the total balance outstanding.

The energy regulator, Ofgem, has told utility companies to offer struggling customers “realistic” debt repayment plans, or emergency credit if they are on prepay energy meters.

The Consumer Council for Water separately warned that the financial help offered to 900,000 households risked running dry without a long-term solution to managing water debts.

But while the pandemic has badly damaged the finances of many households, others are more robust than before the virus struck.

The UK savings ratio – the proportion of total income that is put into savings – has leapt from 6% before the pandemic to 29%, with many of those who have remained employed now flush with cash as a result of spending less on holidays and going out.

Some of that money has been poured into the property market. Figures from HM Land Registry on Tuesday revealed that house prices rose 2.5% in the year to August, with the typical property changing hands at £6,000 more than a year before.

Transaction activity has also soared, with HMRC figures showing a 20% increase in September from the month before.

The financial analyst Laith Khalaf, at the investment group AJ Bell, said: “We are now at least a two-tier nation when it comes to finances. The pandemic has served to widen the wedge between the have and have nots in the UK.

“While 2 million more people may now struggle with bills and repayments as a result of the pandemic, only a few weeks ago mortgage approvals hit a 13-year high, according to the Bank of England.

“Those who have kept their jobs and income will likely have a new cash buffer in their bank account as lockdown [in effect] imposed a spending freeze.”

Newsletter

Related Articles

0:00
0:00
Close
UK Government to Mirror Denmark’s Tough Immigration Framework in Major Policy Shift
UK Government Turns to Denmark-Style Immigration Reforms to Overhaul Border Rules
UK Chancellor Warned Against Cutting Insulation Funding as Budget Looms
UK Tenant Complaints Hit Record Levels as Rental Sector Faces Mounting Pressure
Apple to Pay Google About One Billion Dollars Annually for Gemini AI to Power Next-Generation Siri
UK Signals Major Shift as Nuclear Arms Race Looms
BBC’s « Celebrity Traitors UK » Finale Breaks Records with 11.1 Million Viewers
UK Spy Case Collapse Highlights Implications for UK-Taiwan Strategic Alignment
On the Road to the Oscars? Meghan Markle to Star in a New Film
A Vote Worth a Trillion Dollars: Elon Musk’s Defining Day
AI Researchers Claim Human-Level General Intelligence Is Already Here
President Donald Trump Challenges Nigeria with Military Options Over Alleged Christian Killings
Nancy Pelosi Finally Announces She Will Not Seek Re-Election, Signalling End of Long Congressional Career
UK Pre-Budget Blues and Rate-Cut Concerns Pile Pressure on Pound
ITV Warns of Nine-Per-Cent Drop in Q4 Advertising Revenue Amid Budget Uncertainty
National Grid Posts Slightly Stronger-Than-Expected Half-Year Profit as Regulatory Investments Drive Growth
UK Business Lobby Urges Reeves to Break Tax Pledges and Build Fiscal Headroom
UK to Launch Consultation on Stablecoin Regulation on November 10
UK Savers Rush to Withdraw Pension Cash Ahead of Budget Amid Tax-Change Fears
Massive Spoilers Emerge from MAFS UK 2025: Couple Swaps, Dating App Leaks and Reunion Bombshells
Kurdish-led Crime Network Operates UK Mini-Marts to Exploit Migrants and Sell Illicit Goods
UK Income Tax Hike Could Trigger £1 Billion Cut to Scotland’s Budget, Warns Finance Secretary
Tommy Robinson Acquitted of Terror-related Charge After Phone PIN Dispute
Boris Johnson Condemns Western Support for Hamas at Jewish Community Conference
HII Welcomes UK’s Westley Group to Strengthen AUKUS Submarine Supply Chain
Tragedy in Serbia: Coach Mladen Žižović Collapses During Match and Dies at 44
Diplo Says He Dated Katy Perry — and Justin Trudeau
Dick Cheney, Former U.S. Vice President, Dies at 84
Trump Calls Title Removal of Andrew ‘Tragic Situation’ Amid Royal Fallout
UK Bonds Rally as Chancellor Reeves Briefs Markets Ahead of November Budget
UK Report Backs Generational Smoking Ban Ahead of Tobacco & Vapes Bill Review
UK’s Domino’s Pizza Group Reports Modest Like-for-Like Sales Growth in Q3
UK Supplies Additional Storm Shadow Missiles to Ukraine as Trump Alleges Russian Underground Nuclear Tests
High-Profile Broodmare Puca Sells for Five Million Dollars at Fasig-Tipton ‘Night of the Stars’
Wilt Chamberlain’s One-of-a-Kind ‘Searcher 1’ Supercar Heads to Auction
Erling Haaland’s Remarkable Run: 13 Premier League Goals in 10 Matches and Eyes on History
UK Labour Peer Warns of Emerging ‘Constituency for Hating Jews’ in Britain
UK Home Secretary Admits Loss of Border Control, Warns Public Trust at Risk
President Trump Expresses Sympathy for UK Royal Family After Title Stripping of Prince Andrew
Former Prince Andrew to Lose His Last Military Title as King Charles Moves to End His Public Role
King Charles Relocates Andrew to Sandringham Estate and Strips Titles Amid Epstein Fallout
Two Arrested After Mass Stabbing on UK Train Leaves Ten Hospitalised
Glamour UK Says ‘Stay Mad Jo x’ After Really Big Rowling Backlash
Former Prince Prince Andrew Faces Possible U.S. Congressional Appearance Over Jeffrey Epstein Inquiry
UK Faces £20 Billion Productivity Shortfall as Brexit’s Impact Deepens
UK Chancellor Rachel Reeves Eyes New Council-Tax Bands for High-Value Homes
UK Braces for Major Storm with Snow, Heavy Rain and Winds as High as 769 Miles Wide
U.S. Secures Key Southeast Asia Agreements to Reshape Rare Earth Supply Chains
US and China Agree One-Year Trade Truce After Trump-Xi Talks
BYD Profit Falls 33 % as Chinese EV Maker Doubles Down on Overseas Markets
×