Furloughed workers rely on credit card borrowing in pandemic

Forty-four per cent of currently furloughed adults have borrowed or considered borrowing money on credit cards throughout the pandemic, according to a new Canada Life study.

Research also indicated that 42% have borrowed or considered borrowing money from family or friends, while 41% either have or have considered taking out a loan.

As the furlough scheme comes to an end this month, Canada Life’s study – based on findings from 500 UK adults on furlough – showed how workers have boosted their income throughout the pandemic, with borrowing on credit cards revealed as the most common way of boosting finances.

The findings also indicated that workers on furlough have been looking to use their property wealth to boost their finances. Over a third (34%) of individuals on furlough have remortgaged or considered remortgaging their property to unlock additional income.

Canada Life suggested this has particularly been the case for younger workers, with 49% of 18 to 34 year olds having considered or done this, compared to 36% for 35 to 54 year olds, and just 5% for those aged 55 and over.

“The furlough scheme has provided much-needed support to millions of workers across the country,” Canada Life head of marketing, insurance, Alice Watson, commented. “However, with fragile finances, many have had to consider other sources of income to boost their incomes, whether that be turning to friends and family, looking at forms of credit or accessing the wealth from property.

“As we navigate through the pandemic, it is likely many people will feel additional financial strain as the furlough scheme draws to close this month. Property wealth is playing an increasingly important role in financial plans.

“Anyone considering accessing their property wealth should speak to a financial adviser, whether that be remortgaging or equity release.”

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