UK adults admit they failed to make major payments during pandemic

If extrapolated to the entire UK population, the survey of 2,002 UK adults could mean that 3.2 million people had missed a significant payment in that period, a lapse that could have put them at risk of falling into adverse credit and possibly making it harder to secure a mortgage.

Around four per cent of adults in the poll said they had missed more than one payment, which the lender said showed that some had been financially squeezed by the pandemic.

Among people who said they planned to buy a property within the next year, 10 percent admitted that they had failed to make one or more major payments in the past two years.

Overall, the average number of missed payments was three, and 31 per cent said they had missed five or more payments.

The most-missed payment was for a credit card, followed by a utility bill, council tax, rent, a personal loan and finally, a mortgage.

The Mortgage Lender noted that young adults were most likely to experience financial difficulty, with 11 per cent of 18 to 34-year-olds saying they had missed at least one payment in the past two years and six per cent saying they had missed multiple payments.

Missed payments can hurt a borrower’s credit score and can be negatively viewed by lenders, possibly leading to applications being declined.

Brokers have suggested that borrowers are more likely to be affected by adverse credit because of the pandemic, but added that this could lead to a growth in specialist lending.

Financial difficulties

Peter Beaumont, chief executive of The Mortgage Lender, said that the “true picture” of financial difficulty was coming into “sharp focus”.

He said: “The past two years have impacted many people’s jobs and salaries, putting a squeeze on household finances, and now with the rising cost of living due to high inflation and energy costs there is even greater pressure on the nation’s finances.

“This can all lead an individual to miss a regular payment which then could have a knock-on effect on their access to credit down the line.”

Beaumont said that in the current volatile economic climate, it was important to help prevent people from “falling down a rabbit hole of financial difficulty”.

He said: “The lending market needs to become better equipped to deal with the greater quantities of people who are emerging from the pandemic with adverse credit histories.

“Rather than penalising people for the consequences of an unprecedented event, the industry should be working together to support those who’ve missed payments so that people, especially aspiring homeowners, aren’t locked out of the market.”