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Coronavirus debt

Posted on Mon 30 November, 2020 by Sprout Loans

Effects of Covid on our money

2020 finances: the year which turned income on its head

At the beginning it seemed like we were living through an apocalypse, with no previous frame of reference, no pattern to follow and just unthinkable. The pandemic has forced us to adjust to a new abnormal normal (most irritating phrase of the year) and the necessity to say a fond farewell to many old ways of being. Those of us (and I don’t include myself) who have stopped reeling in horror, have developed a hard-nosed resignation about the prevailing conditions. Once we had the courage to consider anything beyond imminent danger of death, we turned to stockpiling essential household goods, with pitched battles in the local Tesco over a 12 pack of toilet roll or a 4-pack of beans reinforcing the impression that civilisation was dependent on reliable access to grocery staples. The illusion we had been fondly holding all these years of a country largely founded on social responsibility was shaken to the core - shaken but not stirred - as those who could afford it turned to gin and garden furniture, inflatable hot tubs, baking, pets and home improvements to soothe their isolation and fear.

Covid and damage to income

It became quickly clear in Sprout that this was a most divisive pandemic financially, for all the “in it together” slogans, new lines of economic difference developed between the essential, the non-contact, the risky and the forbidden in terms of availability of employment and income security. Soon afterwards the mighty financial chasm opened and it was (and continues to be) completely unavoidable for many people. The already-struggling continued to struggle - not a surprise as those at the bottom are always more vulnerable to ill-effects; albeit more painfully so in Covid 19 conditions.

Covid poverty

As the full horror of the situation was revealed, dependable salaries we would never have queried were suddenly much reduced and many usually financially stable workers dropped into that poverty statistic we’ve all misquoted: “you’re only 1,2 or 3 [select as appropriate to your misery] pay cheques away from homelessness.” This was not so much immediate homelessness, due to temporary emergency mortgage payment breaks and a ban on evictions authorised by government and the FCA - more a grinding, sleep-depriving worry of what the near future would bring and whether income might ever be restored. These were often relatively prosperous people who had earned a good salary previously, with employment or business in tourism, retail, leisure and hospitality. Public-facing jobs took a nose-dive during lockdown for all but essential services and have felt vulnerable ever since. Suddenly we could all feel surplus to requirements and it was clear that some businesses and entire industries were under threat, possibly for much longer than lockdown.

Financial losers in the pandemic

There were husbands and wives who worked in the same business furloughed and in danger of redundancy together, along with family businesses and those who had been horribly unlucky in starting their new business at the wrong time, too late to qualify for a government grant. Or those who were due to start a new job which never materialised.

Some were lucky enough to carry on working (many from home), earning while saving on commute and work expenses, getting to grips with Zoom, getting fit with Joe Wicks, getting fat with workspace proximity to the fridge, baking banana bread and cultivating sourdough starters while others were scrambling to apply for emergency payment breaks and mortgage holidays, deferring ever-increasing backlogs of bills and trying to negotiate government furlough and grants. Everyone with young children struggled with home schooling no matter how perfect their Insta stories looked; managing desperately or heroically with cramped living quarters and limited outside time. And serious health issues, including the virus itself, sometimes delivered a cruel double blow to a random selection of our customers.

Looking after loan customers and treating them fairly

At Sprout, having pretty much seen it all, we understand the difficulties which our customers have encountered – challenges which have often been entirely outside their control. We have delivered payment breaks, interest free for up to six months to those who needed our help due to Covid circumstances. We continue to work with any of our customers in difficulties who are willing to engage with us, to enable us to support them through unprecedented and unpredictable times.

Valerie Nicholson


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