Supporting Britain’s financial resilience

Vim Maru
Group Director, Retail Bank, Lloyds Banking Group
15 April 2021
3 min read


It’s around a year since the UK first went into lockdown. It’s been a challenging time for so many people and the impacts for our customers have been very significant.  Health concerns and separation from friends and loved ones have driven a national sense of anxiety, but we’ve also seen that financial concerns have, for some, compounded things further. The end of lockdown gives us all hope, but, for some, financial difficulties may only just be beginning.  

The recent Financial Lives survey from the Financial Conduct Authority (FCA) shows that 38% of UK adults have seen their financial situation worsen since Covid-19, while almost half (48%) say their financial situation overall has not been affected. For some on higher incomes, household savings have actually risen and debt decreased, however the House of Commons Library has reported that many on lower incomes have run down their savings and taken on additional debt.
 

How has coronavirus impacted household finances?

One of the significant challenges met by UK households is that the consequences of coronavirus expose us to financial vulnerabilities and, in some cases, to financial difficulty. The FCA Financial Lives survey has recently revealed that the pandemic has contributed to putting one in four UK adults at risk of financial harm. Over half now display at least one of the four drivers of vulnerability; health, life events, resilience and capability

The impacts on our customers are potentially wide ranging; job insecurity, a decrease in available hours, the need to shield or isolate, business closures or bereavements, Unfortunately, we’re likely to see implications affecting some UK household finances for months, and possibly even years, to come.
 


The pandemic has contributed to putting 

1 in 4

UK adults at risk of financial harm.



The pandemic means more of us are at risk of experiencing financial difficulty

Many who do face financial challenges – whether a slight bump in the road or a more significant setback – don’t see those challenges coming and may not actually consider themselves as being vulnerable to financial difficulty. Our research suggests that seven in 10 people could miss out on valuable support by not contacting their bank if they are facing financial difficulty.
 

What support is available?

Lloyds Banking Group is committed to supporting the financial health and wellbeing, and improving the financial resilience, of our customers.

As part of our commitment to helping Britain recover, we have over 6,500 colleagues trained to support customers in building their financial resilience. This includes practical measures like identifying appropriate payment holidays or repayment plans, or helping provide protection should the worst happen. Today, we already help the vast majority of our customers that get into financial difficulty back to financial health.  We know it’s difficult, but often the first step is just to get in touch and see how we can help. 

 

Building businesses to last: four principles that can drive our recovery

How can we can drive the recovery from the pandemic in a way that creates long-term prosperity for Britain?

Find out more

It’s by working together that we’ll make a real difference

We recognise that as a banking and insurance provider we can’t prevent or reduce all risks of potential harm for our customers. That’s why we are working with experts from organisations such as Mental Health UK, Surviving Economic Abuse, and a number of free debt advice providers. Our aim is to bring our practical support and expertise in finance to the table and drive awareness of the support available, as well as the positive steps that can be taken to restore financial health and control.

It’s crucial that we continue to combine our efforts and expertise across sectors, to secure holistic and effective support for those who need it. Cross industry initiatives are going to be very important, such as The Debt Respite Scheme (Breathing Space). This will help people in financial difficulty with a more holistic solution across all of their creditors and encourage those who need it to access debt advice and support.   

Best practice codes such as the Inclusive Economy Partnership Code of Best Practice for Debt Collection & Recovery, launched on 26 March, remain important across sectors  to ensure that anyone who finds themselves going through tough times financially is treated fairly and consistently, wherever they turn for support. It’s one of the ways we are able to demonstrate our commitment to making this happen at Lloyds Banking Group.

For many right now, the future is challenging and uncertain, but it is by working together to improve the financial wellbeing and resilience of households across Britain that we will help Britain recover. 
 

Related content

Impact investing

How investing in your future helps to sustainably support communities.

Find out more

Financial resilience

Helping Britain Recover by supporting financial wellbeing and resilience.

Read more

What’s happening in the UK housing market?

How has the UK housing market changed since we went into lockdown last year - and what should we expect in 2021?

Find out more