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Households ‘less confident’ on finances since PM announcement

Extra debt, less confidence and more questions – how has latest lockdown-easing advice affected the UK’s household finances?

Tom Harrison
Content writer
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Posted 21 MAY 2020

The partial easing of lockdown measures has created “no more than apathy” among the majority of UK households – with many others feeling less confident about their finances than before.

That’s the conclusion of comparethemarket.com’s latest Household Confidence Tracker, which paints an uneasy picture for millions of households struggling with mounting debt.

A quarter (25%) feel less confident about their financial situation than they did before the Prime Minister’s announcement last Sunday – while an increasing number (43%) have doubts the government’s exit strategy will even work at all.

The majority of people (61%) say easing measures have made no difference to their financial outlook, but a growing number feel anxious about re-integrating in public places.

Financial confidence plunges

The Tracker, now in its fourth week, points to a hugely significant 25% of households who feel less assured in their finances now than a week ago – with just 13% feeling more upbeat.

Employment prospects also took a hit, with nearly a fifth (16%) claiming the announcement made them less confident about work, against a similar number (15%) for whom the announcement had a positive effect.

As many as 82% worry that ‘re-opening’ the country may cause a second wave of the COVID-19 virus – with 40% admitting they’re “very worried” about the prolonged impact this could have on household finances.

Anna McEntee, product director at comparethemarket.com says: “The Prime Minister’s plan to gradually reopen the UK economy seems to have resulted in no more than apathy among UK households, with most saying the announcement did nothing to improve their confidence around their finances, job or even their health. In fact, in many cases, the announcement has made people more nervous than they were before about getting back into society.

“The government’s exit plan is a gradual one and only time will tell if it can successfully get the UK back up and running. For the moment, however, it seems households will be under significant financial pressure for some time to come.”

Families racking up debt

As with last week’s data, the proportion of households not confident about staying on top of payments in the coming weeks remains at one in five (20%).

But the number who have enough money to tide them over during the pandemic has dropped for a third successive week to 65% – while the proportion who feel they have insufficient income to cover all outgoings has risen by 2%, to over two-fifths (41%).

Compared to 18% of the general population who struggled to keep up with bills last week, a worrying 29% of families with children found themselves in the same boat.

In fact, one in 10 families have had to borrow more – either through family, credit cards or additional loans – just to tide them over. Furthermore, 28% of families with kids have dipped into their savings to stay on top of household running costs – compared to 21% of those without children at home.

Anna McEntee adds: “Households with younger families at home are clearly struggling to make ends meet, as the financial pressure as a result of the lockdown shows no sign of reducing. Despite the government and many companies offering freezes or holidays on bills and debt repayments, this does not seem to be enough for families who have seen their income decrease.”

Fears over public places

With rough plans in place for the reopening of cafes and restaurants by the start of July, the Tracker shows how 53% don’t want to visit public places – up by 10% from the two weeks prior.

Of these, 46% wouldn’t feel in control of their surroundings and say they wouldn’t enjoy themselves.

Among households with a car, just 12% are likely to go on a drive at some point during the upcoming Bank Holiday weekend, suggesting fears over an exodus from cities to the countryside over the weekend may be misplaced.

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