OVER A FIFTH OF FAMILIES WITH CHILDREN AT HOME HAVE HAD TO TAKE A FORM OF PAYMENT HOLIDAY DURING LOCKDOWN
- Over one in ten (11%) families with children have had to ask for a freeze on credit card bills and/or personal loans payments
- The proportion of households whose working circumstances have changed for the worse rises to 41% from 37% last week
- Almost six in ten people feel uncomfortable visiting public places as nervousness increases for sixth consecutive week in a row
Embargoed until 00.01am on Thursday 4 June 2020 – Families with children at home during the coronavirus lockdown are turning to payment holidays to help them through the crisis. According to comparethemarket.com’s Household Financial Confidence Tracker, fewer than one in ten (9[%) of households without children at home say they have taken a payment holiday, but this figure leaps to over a fifth (21%) among families with children at home.
Among this group, over one in ten (11%) say they have had to ask for a freeze on credit card bills and/or personal loans payments. Other common debt freezes include household bills (11%), such as energy, water, motor and home insurance, along with mortgage (6%), council tax (4%) or rent payment deferrals (4%).
On top of requesting payment holidays, (11%) of families with children at home say they have taken out additional debt in the form of credit cards or personal loans in order to manage their household finances during the pandemic.
Anna McEntee, Product Director at comparethemarket.com, said:
“These figures will spark concern that families with children are at a higher risk of taking on unsustainable amounts of debt as the economic impact of the pandemic hits their finances, especially as many payment freeze periods are now coming to an end.
“The government - and indeed many financial services companies - have done a huge amount to help households financially during this difficult time. However, the combination of deferred payments and additional borrowing which will need to be paid back could cause problems for many families over the coming months. If interest accrues on these debts, households may be faced with hefty bills they were not expecting. It is important to only make use of payment holidays on mortgages and other household bills if you absolutely have to.”
Over a quarter (26%) of families with children struggled to pay their bills over the past seven days, up from 23% last week. This compares to 15% of households without children at home. Nearly a third (30%) of families with children think the economic hit from COVID-19 will force them to cut back, or make sacrifices for 6-12 months after the lockdown ends, compared to 19% of households without children at home.
Increase in people seeing their employment status change for the worse, with the young hit hardest
The proportion of households nationwide who said that their working circumstances have changed for the worse is once again increasing. When asked why they were not confident that they would be able to pay or manage household bills over the coming weeks, over four in ten (41%) said that it was because their employment status had changed for the worse, for example they had been furloughed, received a pay cut or lost their job. This is a rise from 37% last week and reflects wider national concerns around unemployment levels once the government’s furlough scheme unwinds.
The figure is more pronounced amongst young people, with 59% of 18-24 year olds reporting a negative change to their employment status. Nearly half (48%) of this age group said that their income is not enough to cover their outgoings at the moment and a quarter (25%) have recently had to dip into savings to tide them over financially.
UK hunkers down as nearly six in ten don’t feel confident going out into society
Government measures around shop openings and permitted social activities came into force this week but UK households are becoming increasingly nervous about getting back into society. The number of people who say that they would not be confident visiting cafes, bars and pubs once they reopen has risen for the sixth consecutive week in a row to nearly six in ten (56%) – up from 54% last week. Since the Tracker began, the proportion of people who say they are not confident about going out to eat and drink has risen by 17 percentage points. The primary reason for this anxiety, citied by nearly half (48%), is that they would not feel in control of their surroundings and therefore wouldn’t enjoy themselves.
Proportion who do not feel confident visiting restaurants, cafes, pubs and cinemas once they reopen
Anna McEntee, Product Director at comparethemarket.com, said:
“We have seen household nervousness around returning to society increase for the sixth week in a row. Despite the government’s insistence that now is the time to get the economy up and running, the UK clearly does not feel comfortable going out to restaurants, cafes and pubs. Household financial confidence is still low and many families appear more concerned about paying the bills rather than returning to pre-lockdown life. This hesitancy to get out and spend could have a significant impact on getting the economy back on its feet.”
Notes to editors:
comparethemarket.com’s Household Financial Confidence Tracker analyses on a weekly basis how the UK’s financial confidence is increasing or decreasing in response to the changes to our lives and finances as a result of the current pandemic.
Populus survey on behalf of comparethemarket.com of 2,087 UK adults between 29-31 May 2020.
With the UK economy and household finances currently taking a hit due to the ongoing COVID-19 crisis, how confident, if at all, are you in being able to meet the demands of / pay your household bills over the coming weeks?
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