Research from retirement specialist LV= highlights how the finances of the UK’s households have been affected by the coronavirus outbreak.
A survey* of the experience and financial position of 4,000 UK consumers reveals that:
The coronavirus outbreak and 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 during the past three months.
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.
The coronavirus outbreak has prompted many people to review their retirement plans but they are divided about what they will do next.
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 financial adviser in the past three months. 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.
“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.
“The big challenge will come when furlough schemes come to an end and it is understandable that many people are saving more money into cash when the future is so uncertain.
“With the stock market volatility of the last few months 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. Talking to a financial adviser is a good idea before taking money out of investments or drawing an income from a pension.”
* LV= surveyed 4,004 nationally representative UK adults via an online omnibus conducted by Opinium in June 2020.
** Comfortably well-off respondents were defined as those with £100,000-£500,000 investable assets (excluding property) such as savings, cash ISAs, stocks and shares ISAs, Premium bonds, Workplace DC pensions, Personal pensions/SIPPs, Transferable DB pensions, Stocks & Shares, Bonds.
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.