Whilst many people have clearly struggled financially during COVID-19, there have been some silver linings like money saved through lack of commuting. Do you think there are any ‘good habits’ or positive behaviours which people have started which might continue after COVID-19?
Absolutely! One of the positives to come out of the crisis is that we’ve seen people across all walks of life increased their financial resilience by being able to build up or increase their savings, including among lower earners. The pandemic has prompted more people to think about financial advice and think about the future beyond this crisis. The most popular use of the extra disposable income that many people have reported is to save towards a ‘rainy-day’ fund, with many others grabbing the opportunity to pay down debt and mortgages – all things that will improve their retirement prospects.
Another silver lining is the improvement in work-life balance for many people. Many industries switched to flexible working arrangements to support their employees which has allowed for people to find a better balance, make better job choices and feel supported in their career ambitions. By offering flexible working, employers are attracting greater, more diverse talent which will benefit them as well as the individual.
Have we been encouraging our customers to keep saving in to their pensions during the pandemic?
The approach we’ve taken at Scottish Widows with our customers is to develop a wide range of support including stepping up our virtual engagement into the workplace of many of the employer schemes that we manage. We tailored the information we shared with employers and their members to take into account the range of different situations faced by businesses including those using Government support schemes like furlough, those that have had to scale down and make redundancies as well as those who have accelerated their retirement plans.
Looking more broadly than our own customer base we’ve made a concerted effort to have our Scottish Widows pensions experts talking about practical steps everyone can take to protect their pensions and long terms savings through our ‘ask the expert’ pod and vod casts on our website to providing hints and tips in the media. Our plans for pensions awareness day in September are also shaping up nicely…
Were any of the figures in the reports particularly surprising or notable?
One of the really notable things from one of our other reports - the Household Financial Index report - is that overall, UK households are feeling more positive about their financial wellbeing for the short-term future for the first time since 2016. We had expected to see a deteriorating picture given the impact of the pandemic on many in terms of their job. The pandemic has encouraged people to think about their own financial resilience and use some of their disposable income that they’ve saved over the various lockdowns towards short-term savings, repayments or their future.
With many people now returning to work after furlough, as well as the easing of restrictions, there has been a much improved trend in UK household income, which will help build future financial wellbeing.