The number of people seeking debt advice is expected to rise in the new year, after support dries up for those hit hardest financially by the pandemic.

UK-wide support including the furlough scheme and the £20 Universal Credit uplift are due to end in October, and rising fuel prices will pile pressure on families over the winter months, experts have warned.

As The National reported last week, new research by the Bevan Foundation revealed levels of household debt had "rocketed" during the pandemic.

But at an evidence session with Senedd members on Monday, experts said people were hesitant about seeking debt advice.

Peter Tutton, from the debt charity StepChange, said the number of people seeking support was "somewhat down" on pre-pandemic levels but "the numbers were starting to creep up".

He predicted a surge in demand for debt advice services next January, February and March due to a short "lag" between the end of coronavirus-related government support and its effect on people's finances.

"We'd expect to see the numbers start to increase more strongly in [the first quarter] of 2022," he told MSs. "The impact in autumn, if people currently on furlough go into unemployment, may lead to an increase in debt advice demand.

"There's a lag between people suffering an income shock and seeking debt advice, and that can be quite substantial – half our clients say they were worried about debt for a year or more before seeking advice."

The furlough scheme and the £20 Universal Credit bonus will be phased out at the end of the month, and October will also bring more expensive heating bills for most households when regulator Ofgem raises the energy price cap.

Gwennan Hardy, from Citizens Advice Cymru, said there were "a lot more challenges coming in the autumn", which looked likely to be "a really worrying time for people" struggling financially.

As the Bevan Foundation's report last week revealed the "uneven" impact of the pandemic on people's finances, so yesterday MSs heard how some groups had been pushed further into uncertainty due to coronavirus.

Self-employed people, those who lost their jobs in the early months of the pandemic, young people, single parents and people from BAME (black, Asian or minority-ethnic) backgrounds were all more likely to be facing debt problems during the pandemic, the experts said.

Jason Roberts, a debt adviser from the Cardiff-based Speakeasy Law Centre, said mental health was also "a huge indicator for people coming to us for debt advice".

Tutton said evidence from the past decade showed how people in these groups were already disproportionately at risk of debt – the pandemic had simply exacerbated the likelihood of them needing support.

Some 29 per cent of adults in Wales saw a fall in income since March 2020, and 10 per cent were in arrears for household bills, he added. And during the pandemic, the number of people reporting "hardship" – skipping meals to save money, for example – had increased as time went on.

The planned end of the Universal Credit uplift has drawn widespread criticism from Welsh ministers and a string of former UK work and pensions secretaries from across the political spectrum; as well as charities and teachers.

The £20 weekly uplift was introduced by Westminster to support families during the coronavirus pandemic, but will be phased out from the end of September, with the UK government arguing it would cost £6 billion to retain them. The welfare system is not devolved in Wales.

Roberts told the Senedd committee the UK government's plans were causing "panic" among the people his organisation helped, and Tutton said removing the £20 bonus would lead to more people living on "negative budgets" – that is, their income is less than their outgoings.

If the uplift was scrapped, he said the number of Universal Credit recipients who would be living on a negative budget would "go up by two-thirds".

This morning, more than 40 charities supporting young people who have been in care or homeless have urged the UK chancellor not to remove the Universal Credit uplift at the end of the month.

Young people will be hit hardest by the removal of the £20-a-week increase, according to the letter, spearheaded by Centrepoint and End Youth Homelessness.

Removing the uplift will be a challenge for all claimants and will leave young people facing “impossible choices” between paying bills and buying food and at risk of repeat homelessness, according to the letter to Rishi Sunak.

Centrepoint chief executive Seyi Obakin said keeping the increase is “without doubt the best way” to keep vulnerable young people off the streets.

He said: “Cutting Universal Credit at the end of the month will mean some claimants are back to being forced to choose between paying the bills and buying food.

“This additional money has been a lifeline for young people in particular during the pandemic and removing it now, when a high number are still looking for work or struggling to get sufficient hours, is the wrong move.”

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