As we pass the one year anniversary of the first lockdown and a year of endless constraints on our daily lives, things are starting to look a little more hopeful for the coming months. With the vaccine continuing to roll out across the UK and the government’s four step plan to ease restrictions, there is a real possibility of life starting to return to near normal in June.
Whilst this is very welcome news for many reasons, some people have been sharing concerns over life post-lockdown, linked to changes in their employment and/or financial position.
We have recently conducted a survey which asked 2,000 people what their financial concerns are when considering life after lockdown.
A massive 38.1% of our respondents said that they are concerned over pressure from friends and family to go out and make the most of restrictions easing over the summer. This is because they are worried about being able to afford holidays, day trips, and meals out because the pandemic has changed their financial position in some way.
According to our survey, 14.1% of people have had to take a salary cut over the last year and they’re concerned about adjusting to this new level of income when life starts to go back to normal. This is playing a major part in people’s anxieties around the cost of increased socialising, but our respondents also cited a number of other reasons why they’re concerned, including:
Social pressure is being particularly felt by people aged 18-24 with 52.8% of this group citing concerns over pressure to go on holidays and day trips when they can’t afford to.
This figure remains high in the 25-34 and 35-44 age groups, with the level of concern reducing as people get older.
Ever since the start of the pandemic, young adults have been the worst hit financially. This is primarily due to them being more likely to work in lower paid jobs or customer service type roles, which have been particularly hit by the pandemic and more likely to have been furloughed or made redundant.
According to the Office for National Statistics, “younger workers and those working in accommodation and food services were most likely to be furloughed and were also less likely to have their pay topped up by their employer when compared with other furloughed employees”.
Also, a financial survey that we conducted at the end of last year revealed that 59% of those aged 18 to 24 and 66.1% of those aged 25 to 34 have had to take out some form of credit solely because of the pandemic. This was most likely a short term, high interest facility such as an overdraft or credit card.
It’s clear that things have been particularly difficult for young adults when it comes to the financial impacts of the pandemic and people are concerned about how they’ll keep up with their friends and family when lockdown is lifted.
After living off of lower incomes because of furlough, having more debts to pay off due to an increase in borrowing, and feeling more social pressure to spend money than any other age group, things look particularly challenging for young people in the coming months.
Concerns over mounting pressure to socialise after lockdown are particularly high in the South East and especially in London.
47.8% of people in the South East are worried about feeling pressured into going out and socialising after lockdown, with this figure rising to 49% for those in London.
According to HMRC’s Coronavirus Job Retention Scheme’s February 2021 statistics*, these areas have consistently had the highest numbers of people furloughed since July last year. This means that more people in these areas than any other area in UK, have had to live off of a reduced income during the pandemic.
Revealed in the same financial survey as previously mentioned, people living in London and the South East were also the most likely, by far, to have taken out additional credit because of the pandemic last year.
There have been consistent financial issues for people living in these areas and it’s clear to see why so many people are worried about the additional cost of socialising when restrictions start to ease.
Another major concern that people are experiencing is the possibility of losing their jobs over the coming months, with 34.3% of respondents sharing their worries over this.
This is split into 16.3% being concerned over losing their job when the furlough scheme ends in September, and 18% worrying that the company they work for won’t survive when restrictions start to ease.
Again, these concerns are particularly being shared by young adults and people living in London and the South East.
The furlough scheme has helped thousands of businesses keep their employees and millions of people keep their jobs over the last year. However, this scheme is coming to an end in September and people are clearly concerned about whether they’ll have a job to come back to when it does.
According to our survey, 27.1% of 25-34 year olds are worried about losing their job when the furlough scheme ends.
As the HMRC’s Coronavirus Job Retention Scheme’s February 2021 statistics* found, those aged between 25 and 34 have consistently, since July 2020, been the age group with the greatest number of furloughed employees. Therefore it’s not surprising that those in this group are worried about their future employment.
46.8% - South East
52.3% - London
With competition for jobs particularly fierce in London and the South East it’s no wonder that many are worried about their future job security
According to the Institute for Fiscal Studies (IFS) London has suffered more job losses as a result of the pandemic than any other area of the UK and continues to feel the pressure of a “geographically unequal crisis”.
In fact the IFS found that the number of employees in London reduced by 5.5% between February and December 2020, which was almost twice the numbers of those in the next most affected area, which was Scotland.
It’s therefore not surprising that over half of Londoners are worrying that more job losses are to follow.
11.2% of people are concerned about how they’ll continue to make payments once payment holidays end later in the year.
Payment holidays have given a very welcomed break to those who have struggled financially as a direct result of the pandemic. The maximum payment holiday for most financial products has been six months. However all payment holidays must now end on 31st July, even if someone hasn’t been able to benefit from the full six months.
This figure shoots up to 20.2% of those aged between 18 and 24, again highlighting the financial struggles that young adults in particular have faced over the last year.
So while the easing of restrictions can’t come soon enough for some, others are clearly going to struggle with getting back to normal after such big changes to their financial wellbeing. The pandemic has been a life-altering event for everyone, and it will take some time to adjust to being able to go out and socialise freely again, especially for those who find themselves in reduced financial circumstances.
* - https://www.gov.uk/government/statistics/coronavirus-job-retention-scheme-statistics-february-2021
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Last updated: 26 March 2021 | © KIS Bridging Loans 2020 |