WITH 60,000 households in the north likely to be affected by redundancy when the furlough scheme switches off after September 30, Advice NI is warning that levels of household debt will soar as a result.
The charity dealt with 500,000 enquiries in 2019/20, and last year alone its debt service dealt with more than £28 million of debt in more than 7,500 agreements.
But the advice organisation anticipates that this could become worse as 2021 progresses.
Significant sums of public money are being spent to protect household incomes via the government's furlough and self-employed support schemed, with Northern Ireland benefitting so far from nearly £3 billion of the estimated £62 billion across the UK in 2020-21.
Advice NI says some furloughed workers “may have developed a false sense of security” because of the various government support packages in place.
“Some workers may not be fully aware that, unfortunately, redundancy is a very real threat, and 60,000 workers currently on furlough could be at risk of potential job loss and the extra financial pressures this will put on household debt,” according to Sinead Campbell, head of money, debt & quality at Advice NI.
“The Coronavirus Job Retention Scheme is a fantastic initiative and has proven to be a lifeline for many during the pandemic. But the reality is that it is due to come to an end soon, and if you are furloughed, now's the time to examine your finances to see how you could strengthen them ahead of a potential redundancy after September.”
She is urging creating a carefully managed household budget to ensure you are not overspending.
“A rule of thumb would be to have about three month’s salary saved to cover a job search. You will need to ensure that, should you lose your job, you will still be able to cover priority debts, like mortgage repayments, rent and utility bills.
“Examine all of your outgoings and shop around to find better deals on things like phone contracts, insurance and energy suppliers.
“As lockdown eases, it’s tempting to eat out again, but be sure to look around for restaurant deals to reduce the expense. Also try using supermarket coupons and loyalty schemes to save money on your weekly grocery shop.”
Advice NI’s free and confidential Debt & Money Service on 0800 915 4604, funded by the Department for Communities, aims to help people in managing their finances, and Sinead added: “If you do find yourself concerned about managing your finances or struggling with debt during the pandemic, you don’t have to face it alone.”
