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Demands on the “Bank of Mum and Dad” are rising as adult children ask for help in rebuilding their finances

Demands on the “Bank of Mum and Dad” are rising as adult children ask for help in rebuilding their finances

Threat of redundancies and business failures means higher earners need help with their finances

How Covid-19 is escalating problem debt

Threat of redundancies and business failures means higher earners need help with their finances.

Millions of people are desperately worried about their finances during the current crisis. The sudden “income shock” that many professionals and business owners have experienced occurred without warning, and nobody can be certain how much longer it will endure.

The worst affected groups are already afraid that they will have to file for bankruptcy or another form of insolvency as their debt problems spiral.

Helplines have been inundated with queries from people wanting to know what their options are, including growing numbers of limited company directors and those who have started their own small businesses who find themselves unable to access government support schemes.

However, they fear demand will increase exponentially this summer as payment holidays and state-backed furlough schemes supporting millions of UK workers come to an end, and redundancies increase.

Half a million UK firms are at risk of collapse, according to insolvency experts Begbies Traynor. Many professionals are being asked to take pay cuts, work reduced hours or consider a sabbatical to help firms limit the numbers they will have to lay off.

At the same time, demands on the “Bank of Mum and Dad” are rising as adult children ask for help in rebuilding their finances, increasing the pressure on families who, a few months ago, would never have dreamt this could happen to them.

Here is FT Money’s survival guide for all those who are anxious about their financial situation and need to know how to find the best route through these challenging times.

Tim K. Dean, Credi Founder | Commentator & Expert on Family Lending, Bank of Mum & Dad and Neo-Credit Scores is available for media interviews and appearances. More…

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