Tel: 01283 701569

Experienced Independent Financial Advisers

Navigating the financial impact of COVID-19

25 Sep 2020

How people’s physical health and financial well-being are being affected

Needless to say, coronavirus (COVID-19) has had, and will continue to have, a major impact on our lives. It is not just impacting on people’s physical health but also their financial well-being. Research highlights how the finances of the UK’s households have been affected by the coronavirus outbreak[1].

Given the economic uncertainties caused by COVID-19 and the extended lockdowns, financial worries have increased. During these uncertain times, it is very important to assess the current financial situation and gauge the long-term impact on our personal finance.

Saving more money
The pandemic has prompted many people to review their retirement plans, but they are divided about what they will do next. Fears about the future have prompted 18% of the general population to review their finances, and nearly one in four (23%) have been saving more money.

Nearly a third (31%) of consumers say they are worried about their finances, and 28% have seen their outgoings decrease in lockdown, leaving them with increasing amounts of money in their current accounts.

Taking early retirement
More than a quarter (28%) have seen the value of their pensions fall. Some 6% of the over-55s are considering taking early retirement, while conversely 4% are thinking of delaying retirement. Despite this, only 3% have consulted a professional financial adviser during this period.

Fewer than one in ten (8%) have increased the amount of money they are saving into a pension, while one in ten have cut their pension contributions. Part-time workers have been most affected by the coronavirus outbreak, with four out of ten (40%) seeing their incomes fall compared to a quarter (26%) of full-time employed people.

Comfortably well-off
Although four out of ten (41%) of the comfortably well-off group[2] have seen a fall in their monthly outgoings (compared to 32% of the general population), one in four expect their finances to worsen over the next three months. More than one in four (25%) employed comfortably well-off people surveyed have seen a decrease in their income compared to 29% of the general employed population.

However, fewer than one in ten (9%) of this group surveyed have been furloughed compared to 12% of the general population. 35% have seen an increase in the amount in their current accounts compared to 28% of general population.

Polarising personal finances
Although relatively well-off families have been able to save more as they remain in employment and their monthly outgoings have reduced, coronavirus is further polarising the personal finances of people in the UK. And many people – particularly those who are self-employed or working part-time – have been hit much harder.

With this year’s stock market volatility and fears about impending job losses, it’s understandable that people are taking a safety-first approach and saving more into current accounts. However, saving too much into cash means you could miss out on future investment growth, while cutting pension contributions can cause you to have less money in retirement.

Source data:
[1] LV= surveyed 4,004 nationally representative UK adults via an online omnibus conducted by Opinium in June 2020
[2] Comfortably well-off respondents were defined as those with £100,000 to £500,000 investable assets (excluding property) such as savings, Cash ISAs, Stocks & Shares ISAs, Premium bonds, Workplace DC pensions, Personal pensions/SIPPs, Transferable DB pensions, Stocks & Shares, Bonds

Footnote: Our belief is that all finacial advice should be tailored to your particular needs and situation. The content of the articles featured in here are for your general information and use only; they are not intended to address your particular requirements or constitute a full and authoritative statement of the law. They should not be relied upon in their entirety and shall not be deemed to be, or constitute advice. Although endeavours have been made to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough examination of their particular situation. Please get in touch to meet with us for a full consultation.

Get in touch for more details

Please fill the form below to contact us

    Your Name (required)

    Company Name

    Your Email (required)

    Areas of concern

    Individual servicesCorporate servicesMiscellaneous


    Your Message

    We take your Privacy Seriously. Personal information submitted to us with this form will be treated in accordance with the Data Protection Act 2018 and General Data Protection Regulations ‘GDPR’. By submitting this enquiry form you expressly consent to be contacted without prior notice or arrangement by using the contact details you have provided on the form. For further information on how we treat your personal information, please view our Privacy Policy

    I have read and agree to the privacy policy. Please retain my details to contact me.Please do not add me to the mailing list.