We know that the last 12 months have been incredibly hard for many, so much so that the UK public reduced their weekly outgoings by 19% – many for necessity.
As a company that supports thousands of people in debt, we wanted to see just how much of an impact our customers were feeling from the multiple lockdowns and potential decrease in earnings. Back in April, we surveyed our customers to find out…
The financial impact of COVID-19.
Whether you’ve had to cut back on the occasional expense, or your livelihood has suffered as a result of the pandemic, you’re not alone. In fact, just over 40% of our customers say that they were in a worse financial position due to COVID-19, with only 4.3% saying they came out better off financially.
Although this is (unfortunately) to be expected after such a large-scale economic shock, the devastation it caused to various industries as a whole means we may not see the come-back we’re after for a while yet.
Over 693,000 people lost their job over the last year, which is a worryingly high amount.
Although many of our customers’ jobs weren’t affected, at least 18.4% of our customers had their hours reduced, 7.1% lost their jobs completely, and a further 5.6% were left feeling unsure if their job would still be there once the furlough scheme ended.
Spending & saving.
When it comes to regular household spending, a huge 68% say they had to cut back in some way or another, or delay making purchases during the pandemic.
In addition, just over 39% say they needed to use money from their savings (or borrow money from friends & family) due to challenges brought on by COVID-19. This led to nearly 26% being overdrawn more than usual and at least 17% missing bill payments during the last 12 months.
It’s also led to essential food bank use for 7.1% of our customers, which isn’t surprising seeing as food bank usage increased by 47% during the pandemic.
Despite this, it seems that things are looking up for the majority of respondents, with 93.7% saying they hadn’t felt the need to apply for loans or credit cards over the last 12 months and 72.6% saying they’re unlikely to miss bill payments in the near future.
This is a topic that has impacted many recently, whether it’s to do with finances or not. Looking at what our customers have told us, it seems there’s a fairly even split when it comes to mental health, with 49.2% saying their mental health had suffered as a result of COVID-19.
Our infographic below gives an overview of what we’ve found…
There’s no set formula to a healthy relationship with money – you might be doing really well financially, and then something like a global pandemic comes along and de-rails your plans (and your savings).
At the end of the day, no matter where you are in your financial journey, support is always available to help you get the most out of your money and your long-term goals.
Take a look at our Benefits blog post, which lists in detail the various types of financial support that could be available to you.
If you don’t qualify for benefits, you can try MoneyHelper’s Couch to Financial Fitness nine-week plan, built to help you increase your confidence in managing your money. It focuses on things like cutting down on spending, developing core savings, and creating better financial habits for the future, and you can get started today.
If you’re in debt and it’s becoming hard to manage on your own, our expert Advisors are only a call or email away; get in touch with our team on 0161 837 4000, or email us at firstname.lastname@example.org.
If you’re not quite ready to speak to someone just yet, head to Advice Online, our fully-digital financial advice service that lets you find out which solutions you’re eligible for.