ONE FIFTH OF UK HOUSEHOLDS WILL STRUGGLE TO PAY THEIR BILLS OVER THE NEXT FEW WEEKS DUE TO COVID19 LOCKDOWN, AS THOSE FAMILIES WITH CHILDREN AT HOME ARE HIT HARDEST
- A fifth (20%) say they are not confident they will be able to meet payments or stay on top of household finances over the coming weeks, increasing to nearly a third (31%) amongst families.
- Of those who are not confident about their finances, 39% said this was because their employment status had changed for the worse, for example they had been furloughed, received a pay cut or lost their job.
- 39% would not be comfortable visiting pubs and restaurants once they reopen and 57% have no plans to book a holiday.
1 May 2020 – Nearly a fifth of UK households are struggling to pay their bills because of the government lockdown imposed due to COVID19. According to comparethemarket.com’s new Financial Confidence Tracker, 20% of households are not confident that they will be able to meet due payments or stay on top of household finances over the coming weeks. Amongst those households with children at home, this rises to nearly a third (31%).
Concerns over affording household bills in the coming weeks were expressed by a slightly larger number of people than those who had struggled with their domestic finances during the previous week – an indication that the financial impact of the coronavirus could get worse in the short term. 17% of households admitted that they had struggled to make ends meet financially over the past seven days. Again, this financial anxiety is higher amongst families with children, as over a quarter (29%) of this group said they found it “difficult” to pay their bills last week.
When asked why they were not confident that they would be able to pay or manage household bills over the coming weeks, almost four in ten (39%) 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.
Other common reasons for low financial confidence are that their household income is not sufficient to cover their outgoings (38%) and that the Government had announced new financial measures to help households but “they don’t apply to me” (31%).
Doom and gloom in the headlines also seem to have an impact on the nation’s financial confidence, as 29% say that they have noticed more concerning news over the past week related to the lockdown which has made them more worried about money.
For a significant proportion of those who are confident they will be able to pay their bills, prudent household financial management has been a key factor; 28% say that they have already taken steps to reduce household spending.
Financial confidence highest amongst oldest and youngest generations
The financial confidence of different age groups provides further evidence that parents with dependents at home feel most impacted financially by the virus. Those aged between 45 and 54 say they struggled the most of any age group to manage their bills over the past week, with nearly a quarter (24%) saying it was “difficult”. An even higher proportion (29%) of this age group are not confident they will be able to meet payments in the near future.
Conversely, the oldest and youngest age groups – those least likely to have children living at home – are the most financially confident in the wake of COVID19. The majority (92%) of over 65-year olds are confident they will be able to meet the demands of their household bills over the coming weeks, with over half (51%) saying they are “very confident”. Amongst older people who are confident about their finances, only 15% of over 65s have taken steps to cut down household spending.
The story is similar for 18-24 year olds, with 86% saying they had paid their bills with ease over the last seven days and 81% saying they are confident they will be able to meet financial requirements over the coming weeks.
Londoners least confident on the outlook for their finances
Over a quarter (27%) of Londoners are not confident they will be able to meet the demands of their household bills in the coming weeks – the highest percentage of any region, followed by the North East (24%). By contrast, Yorkshire & Humberside and the West Midlands appear the most confident in their financial outlook, with only 14% in both regions expressing concerns.
UK hesitant to return to normal life, even once lockdown is lifted
The research finds that, even when the lockdown is lifted, the UK is hesitant to return to normality, which could have a significant impact on the wider economy. When asked if they felt confident visiting restaurants, cafes, pubs and cinemas once they reopen, over a third (39%) said they were not comfortable doing so, with one in ten (10%) saying this is because they no longer have the disposable income to spend on these types of leisure activities. Over a quarter (29%) said that they would not feel in control of their surroundings and therefore would not enjoy themselves. This figure jumps to a third (33%) amongst over 65-year olds.
Respondents were also hesitant to book holidays. Over half (57%) are not planning any breaks in the foreseeable future. Amongst those who were looking to book a holiday, only 30% said they were planning to go away in 2020.
comparethemarket.com’s Financial Confidence Tracker will analyse 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.
Anna McEntee, Product Director at comparethemarket.com, said:
“The ongoing restrictions brought about by the pandemic are crucial to keep us all safe and healthy, but these measures appear to be putting significant strain on household finances. Our findings show that a significant number of people struggled to pay their bills over the last week and, worryingly, an even higher number think it will become more difficult in the weeks to come.
“The situation could get worse before it gets better, in particular for those who have seen their ability to work change for the worse. There is even greater financial pressure on those households with children at home, as there are more mouths to feed and more people to take care of.
“It is still unclear when, and under what terms, the lockdown may start to ease. However, people’s reluctance to spend money on holidays and in restaurants, cafes, pubs and cinemas once they reopen could have a worrying impact on the wider economy and helping many UK businesses back on their feet. The government is working on an exit strategy from the current lockdown, but it remains to be seen whether the UK is ready, or even really wants, to go back to “normal”.”
Notes to editors:
Populus survey on behalf of comparethemarket.com of 2,075 UK adults between 24-26 April 2020
How confident, if at all, are you in being able to meet the demands of / pay your household bills over the coming weeks?
|Yorkshire & Humberside||14%|
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