The data shows 30% feel their household finances have been affected by the coronavirus. Those who said they “needed to borrow money or use credit” were 2.2x as likely to report high anxiety, and the odds of feeling high anxiety were 1.7x as great for those who said their “pension was being affected”.
“The Covid-19 pandemic has been a major shock to the economy. Millions of people have experienced a fall in income through either furlough or redundancy, and the economy fell off a cliff edge in April with the country in lockdown.
“At the same time we experienced a sharp decline in global stock markets, damaging investment values. This is a particular concern for retired people who are likely to have the most immediate need to generate income from their pension investments.
“It is no surprise then that almost one in three people reported that their household finances had been impacted by Covid-19. Those that are borrowing money are more than twice as likely to report feeling anxious, and there is also a higher level of anxiety among those people that said their pension had been affected.
“Evidence shows that around 11 million people have only £100 or less in savings to fall back on. That means they’re ill-prepared for a financial shock and are at risk of needing to borrow to meet bills and others expenses. Borrowing can be part of a healthy household financial plan, but it needs to be sustainable. It becomes risky when you’re borrowing to finance day to day expenditure. It is a really good idea to keep at least three months’ worth of essential spending requirements in the bank to provide a buffer against a financial setback.
“There may be a silver lining to all this, however. Research conducted by Quilter* at the end of April shows that the coronavirus crisis could encourage people to become more generous, with more than half of UK adults feeling motivated to support friends and family financially. One in five (20%) said they had been prompted to help others with short term financial matters like paying a bill or covering a one-off cost, and 17% said they’d been encouraged to think about how they could help relatives enjoy a more prosperous future through things like inheritance or gifting money. Combined with the 15% that said they were supporting friends and family before the crisis, it means that over 50% of us could now be looking to help others with money.”
*Survey conducted by Toluna on behalf of Quilter between 27-30 April 2020 with 1014 UK adults