Quarter of UK families reduce work hours and pay during lockdown
A third of households with children at home now expect school closures to negatively impact their finances.
An alarming 17% of parents think they or their partner may be forced to give up work altogether to cope with ongoing school closures.
Parental obligations have already led to a quarter (25%) of families with children at home voluntarily reducing their work hours and pay, as the UK continues to come to terms with the everyday realities of the COVID-19 pandemic.
Overall a third (33%) of families now expect school closures to have a negative impact on their finances, according to comparethemarket.com’s latest Household Financial Confidence Tracker – which shines a light on the work/life balance conundrum facing millions across the country.
Long-term dangers of school disruption
While pupils of varying ages have been able to return to the classroom in recent weeks, many more schools won’t reopen until September at the earliest – posing problems for millions of working parents.
Of the 25% of families who have voluntarily taken pay reductions to better balance their work and childcare commitments, over one in 10 (13%) say the cuts have been “significant”.
And while almost a fifth believe leaving their role might be on the cards, a third admit household finances will take a hit if schools don’t reopen soon.
The Tracker points to a 5% upsurge in the proportion of families with children struggling to pay their bills – from 22% to 27% in the last week – while 30% now think they’ll struggle in weeks to come, up from 24%. This is almost double the number of households without children at home who share the same worries (18%).
Anna McEntee, product director at comparethemarket.com, said:
“Ongoing school closures mean parents are spending more money on food, clothes and entertainment, but the demands of childcare and home schooling are also leaving many struggling to balance their professional and home lives.
“The pandemic has put many people under financial pressure but it is particularly concerning that parents are having to cut their hours and reduce their pay in order to look after their children.
“The big danger is that households which are forced to make changes to their working arrangements to enable them to meet immediate financial and parenting responsibilities may be unable to switch back to their former job structures once schools return to normal. In other words, some families may be faced with a significant long-term financial impact due to the need to address a shorter-term challenge.”
Tough times for high street
Despite the reopening of many big-name ‘non-essential’ shops this week, the data suggests the majority of shoppers will continue to keep their distance.
As many as 60% of UK households are unlikely to pay a visit to such stores, with more than a third (35%) sceptical over the enforcement of social distancing measures; 16% preferring to shop online, and 10% having no spare cash for non-essentials.
London is the only region where over half of households plan to hit non-essential shops in person, with a narrow 54% swing.
In an attempt to lure shoppers back to the high street, the Chancellor is believed to be mulling a temporary VAT cut on in-store buys – but the Tracker suggests even this may not be enough.
Overall, only 46% said slashing VAT might tempt them back to stores, with the majority prioritising safety over savings.
And the sense of trepidation over returning to shops also prevails over cafés, pubs, restaurants and cinemas – with 56% claiming they’ll still be uncomfortable once these establishments reopen in the coming weeks.
Anna McEntee comments: “UK households remain nervous about returning to spending their money on the high street. Despite shops offering deals and discounts, concerns around social distancing and increased comfort with shopping online suggests it will take some time before footfall picks up again, and for retailers to start to see the benefits of an easing lockdown.
“The Government’s rallying cry of ‘get out and shop’ looks easier said than done and the journey back to economic normality promises to be long, bumpy and difficult.”