Feeling sorry for yourself isn’t a very good idea, but you could be forgiven for succumbing to it after the last few years we’ve all had.
Let’s face it: so much heartache has been caused by Covid-19. There has been a dreadful loss of life – unprecedented in the post-WW2 era – and economies have been deliberately put into recession.
While governments around the world took steps to soften the collective blow and mass unemployment was averted, truly staggering amounts of money were spent on propping up economies and keeping people with a roof over their head. And that will all have to be paid back, although this will presumably take place over the long-term; I don’t feel there in any appetite whatsoever in the UK for a return to the austerity years, especially when we’re in the middle of a cost of living crisis.
Of course, not everyone has managed to escape financially unscathed. The Office for National Statistics reported that the number of people claiming unemployment related benefits in February 2022 was 510,000 higher than in March 2020, when the pandemic and subsequent first national lockdown began.
The pandemic has also put massive pressure on relationships. I’ve said this before, but I doubt there is anyone who previously got married thinking that they would subsequently have to spend two years living and working together with very little respite from each other. Unsurprisingly, according to The Independent, divorce enquiries to legal firms in 2021 increased by 95% year-on-year, with women making up the majority of queries.
Relationship breakups can often cause financial difficulties. The costs of divorce from legal fees and selling property for example can be high, and sadly often individuals can have the credit affected by the financial behaviour of their (ex) partner.
As if all that wasn’t enough, the cost of living crisis is putting a strain on people’s ability to pay their energy costs and the war in Ukraine is making matters worse. With energy bills set to rocket even higher in October, the government has just announced some measures to help with bills but in all likelihood the cost of living crisis will see a further rise in the number of missed payments.
What we are witnessing and expect to continue to see is an increase in the number of people with impaired credit. At Central Trust, we look to help victims of circumstance who have missed payments but where it can be evidenced that their circumstances have changed.
While they may fall short of securing finance from a mainstream lender due to the latter’s reliance on credit scoring or the need for two or more years’ worth of clean credit history, we take a common sense approach to underwriting, looking at the borrower’s circumstances in the round.
Very often we can offer a second charge mortgage, which can help rebuild the credit, clearing the historical arrears, improving the score and enabling them to refinance back onto the high street.
Now, brokers will have clients who are currently feeling very sorry for themselves, and probably with good reason. What they need to realise is that if they take action, and speak to the right lender, they may well be able to improve matters and start getting on with the rest of their lives.
At Central Trust, we don’t look to penalise those who have been affected by things out of their control; our mantra is ‘repair and rebuild’ and we’re helping clients to put their financial lives back together every day.
Maeve Ward is commercial director of operations at Central Trust
