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.