• 20% (10m) UK adults said their income has decreased over past three months
• 26% (13m) UK adults expect their finances to worsen over next three months as drops in income continue
Research from pensions and retirement specialist LV= highlights how the finances of UK adults are being hit as the second lockdown bites.
The LV= Wealth and Wellbeing Monitor* - a quarterly survey of 4,000 UK adults – reveals that a growing number people are struggling with the financial repercussions of the second coronavirus lockdown. An increasing number are pessimistic about the outlook for their finances and some are resorting to accessing their pensions to supplement their income.
The LV= Wealth and Wellbeing Monitor reveals:
• Personal finances worsen: Some 36% of the adult population (18m people**) said their finances were worse than three months ago with only 11% saying they were better. 26% (13m people) expect their finances to worsen over the next three months, while 12% expect it to improve.
• Drops in income continue: 20% (10m people) say they have seen their income fall in the past three months, compared to 13% who said their income increased, highlighting how people are still experiencing a negative impact on their incomes as a result of Covid.
• Retirement plans changed: 13% of people surveyed have reduced the amount they are saving into a pension. 4% of people not retired at the start of 2020 said they have had to access their pension savings to make up for reductions in income or redundancy. Some 8% of those people not retired at the start of 2020 say a reduced income has meant they may have to retire later than planned.
• Spending at supermarket remains elevated but socialising is down: Due to the second lockdown, 61% (32m people) said the amount they spent on socialising decreased in the past three months and 30% (16m people) say their spending at supermarket had increased.
“Figures from the LV= Wealth and Wellbeing Monitor highlight just how difficult life has become for millions of people since the introduction of the second lockdown, and the finances of millions of people have deteriorated markedly since the summer.
“During the summer, loosening of lockdown restrictions led to an increase in consumer spending, a reduction in saving and an increase in spending on socialising. However, the second lockdown, increased company failures and redundancies are shaking consumers’ confidence and reshaping their attitudes to savings and spending.
“Many people are reducing their long-term savings into pensions, while some of those aged over 55 have even resorted to drawing money from their pension to make up for reduced incomes or job losses.
“However, the development and introduction of vaccines is terrific news and we would hope to see an uptick in people’s outlook in next quarter’s Wealth and Wellbeing Monitor data as we start to see a return to a more normal way of life.”
*LV= surveyed 4,000 nationally representative UK adults via an online omnibus conducted by Opinium in December 2020.
**UK population stats from ONS. Total UK population is 66,796,907 (released summer 2020), of which 79% of UK population are adults (mid-2019 calculations) resulting in 52.7m UK adults.
LV= is a leading financial mutual. When we started in 1843 our goal was to give financial security to more than just a privileged few and for many decades we were most commonly associated with providing a method of saving to people of modest means. Today we follow a similar purpose, helping people to protect and provide for the things they love, although on a much larger scale and through a wide range of financial services including insurance, investment and retirement products.
LV= and Liverpool Victoria are registered trademarks of Liverpool Victoria Financial Services Limited (LVFS) and trading styles of the LV= Group of Companies.Liverpool Victoria Financial Services Limited, registered in England with registration number 12383237 is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, register number 110035. Registered address: County Gates, Bournemouth, BH1 2NF. Phone: 01202 292333.