Workers on furlough three times more likely to have missed payments in last month, according to survey

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23rd August 2020 12:52 - Financial Services

Workers on furlough three times more likely to have missed payments in last month: New research from Which? has revealed that people who have been furloughed by their employer, have had their hours reduced, or have been put on enforced leave are more likely to have missed at least one payment in the last month (13%), compared to just 4% of those who have continued to work as normal.

The survey of 2,129 nationally representative people polled in July, also found that 7% of those who had defaulted on payments had not been able to pay a bill, with 6% defaulting on a loan or credit card payment and 5% defaulting on rent or mortgage payments. 

Which? said that the research shows the 'uneven impact of this crisis on different groups of people', despite the number of government schemes brought in to help support people and businesses.

Changes to spending

The survey found that 60% of the furloughed workers polled (as well as those on reduced hours or put on enforced leave), have made at least one change to their spending patterns in the last month, compared to 42% of those who are working as normal. 

A little over a third have taken measures to cut back on essential spending (34%) revealed the poll, while 31% have had to turn to their savings to help get them through. Some of the respondents polled said they have turned to using their overdraft facility (14%) to pay their bills and everyday expenses. 

Which? said it is in support of the FCA taking steps to consider the extra help needed for those people who have been on furlough scheme, especially as it comes to and end in October. 

Richard Piggin, Head of External Affairs and Campaigns at Which? said: “With just a couple of months until the scheme comes to an end, there is real concern that this gap [between those who have been furloughed and those who have remained in work] could widen even further.

"The FCA is right to take steps to consider the additional support required and the industry will also have to ensure consumers are provided with the help they need if they are in financial difficulty,” he said.

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