Charity funds of the United Kingdom have decided to wipe out all the debts for a certain number of people. Actually, those people were really struggling to repay their normal debts, council tax as well as unsecured debts. As we all know that the entire world is struggling with the outbreak of Coronavirus. As a result, their low incomes and debt repayment are becoming key factors to deteriorate their financial condition.
Nearly, 80 charity funds, trade unions, academics, and campaign groups have already given a statutory warning to the millions of middle-class earning people. The warning was that they could anytime get into a deep trap of debts. In addition to that, it will be impossible for them to recover the critical situation without the help of the government.
Facing the Ultimate Redundancy
Just because of COVID-19, many people are losing their jobs as well as wages too. Moreover, if those people are in debt, then they will never be able to repay it. The immediate hold on debt repayments, mortgage loans, and other factors is issued by the charity funds. In the case of the people who have taken mortgage holidays, they will not have to pay the interest as well.
Crisis for the Debt Repayments
Across the United Kingdom, there are large numbers of families that have comparatively low incomes. Due to that, they are aware of facing a major hectic situation as the repayment is just like an additional cost for them. Eventually, they are all humans and just need some space to breathe properly.
Before this crisis situation, various analysis reports say that more than 3 million household people of the United Kingdom were in debts. They were gradually repaying those debts from their income. Further analysis also states that, among those 3 million household people, just half of them had a monthly income of not more than £15,000 in a single year.
Campaigner’s Estimation and Suggestion
A certain campaign is done to find out the estimated loss if they decide to write off the £10 billion debts that belong to the UK government. From the £10 billion, £2 billion belongs to overpayments of housing purposes, £3 billion sticks to council tax arrears. The rest of the amount belongs to local authorities.
Many experts say that these are those cases where the household people must not be included, but somehow they are being included. Those people who are in the most vulnerable state will get relief from the claw of overpayments of their debts.
In addition to that, the campaigners were also in contact with the Chancellor for a certain purpose. The Chancellor has the power to cancel out all the normal and council debts as well as utility bills as well.
According to suggestions given by the campaigners, the United Kingdom government is ready to work with the Financial Conduct Authority and Bank of England. The main purpose of this co-ordination is to set a loan facility that will eliminate the interest. It has a certain similarity with the business loan scheme given by the British Business Bank. This will result in granting an interest-free loan for low-income household people.
Position of Business in this National Crisis
The United Kingdom government has declared that workers of a certain business concern will not have to repay their debts as their family belongs to the low-income category. It can be a small price that will eventually let that family live peacefully. There are various demands regarding the writing of debts coming from people due to the effect of Coronavirus.
People are asking for a credit regarding sickness and there are also other factors. But, it is not really possible to repay the credit just because of the low family income. As we know that many families are still struggling to repay their debts. It will be more of a hectic situation for them to pay once more.
Support to the Workers
According to recent reports, the chancellor of the United Kingdom planned to help the workers through support package. This package contains a guaranteed business loan, 80% of worker wages for three months. In addition to that, the package will also cover all the medical treatments as well.
The Chancellor also stated that they have decided to increase welfare. Moreover, they also wiped out universal credits as well as the tax credits to help the people with their debts and council tax as well.