• 15.5 million Brits have already had to dip into their savings during the crisis
• Younger people are hit hardest, with 44% of 18 to 34-year-olds using savings
• 11 million people have already taken on debt…
• …with credit cards, overdrafts and loans from loved ones being most common
• Two-fifths of the population have seen their income hit as a result of Coronavirus
• More than half the population are worried about getting into financial difficulties
Laura Suter, personal finance analyst at investment platform AJ Bell, comments:
“Research shows 15.5 million Brits have already had to dip into their savings as a result of the Coronavirus crisis, after seeing their income hit as companies across the UK shutdown or furlough workers in lockdown. However, young people are bearing the brunt of the financial troubles, with more seeing pay hit and having to dip into savings and take on debt.
“Overall 30% of people have had to use their savings to pay bills, rent, mortgage and other essentials so far in the crisis. But a huge age divide is emerging in the UK, with 44% of those aged 18 to 34 having to use their savings compared to 18% of those over the age of 55. Many younger people work in industries that have been harder hit by the lockdown and business closures, such as retail, hospitality, the arts and freelance work, and so will have taken hits to their income.
“Dipping into savings isn’t an option for a large number of households, who have no emergency savings to fall back on, meaning one-fifth of the population has already taken on debt in order to pay for essentials. So far 10% of people have put debt on their credit cards, while 8% have taken a loan from family or friends, and 7% have taken on more overdraft debt. These figures are likely to soar in the coming months as people get their first reduced pay-checks since being furloughed and more people lose their job or see their incomes cut.
“Two-fifths of the population have already seen their income hit as a result of Coronavirus, with most due to being furloughed at work or having to take a pay cut. As the furlough scheme comes to a close we’re likely to see some of these people laid off, and so take an even bigger hit to their income. The falls in stock markets have also hit people’s incomes, with over a quarter of those who’ve seen their income hit saying it’s due to investment or pension income falling, while 8% have had to cut their pension withdrawals.
“People are braced for more financial hits as a result of COVID-19, with more than half the population saying they are concerned about getting into financial difficulties in the current crisis. Again, younger people are more likely to be worried, as they tend to have lower savings to fall back on and are in more precarious job roles, with two-thirds of 18 to 34-year-olds saying they are worried about future financial difficulties compared to 35% of those aged 55+.”
* Based on nationally representative research of 2,002 adults in the UK by Opinium and AJ Bell.
** In a nationally representative survey of 2002 UK adults, 592 said they have had to dip into savings. 592 / 2002 * 52,383,000 (UK adult population) = 15,489,878 or 15.5 million.
Full findings from research:
|
Have you had to dip into your savings since the COVID-19 crisis hit the UK in February? |
||||
|
|
|
Age group |
||
|
|
Total |
18-34 |
35-54 |
55+ |
|
Yes |
30 % |
44 % |
31 % |
18 % |
|
No |
70 % |
56 % |
69 % |
82 % |
|
Which, if any, of the following has caused a drop in your income during the COVID-19 crisis? |
||||
|
|
|
Age group |
||
|
|
Total |
18-34 |
35-54 |
55+ |
|
I’ve been furloughed |
14 % |
20 % |
18 % |
6 % |
|
Dividend income from my investments has reduced |
8 % |
10 % |
9 % |
7 % |
|
I’ve had to take a pay cut |
7 % |
14 % |
8 % |
2 % |
|
I’m self-employed/have my own business and have lost work |
7 % |
9 % |
8 % |
5 % |
|
I’ve lost my job |
4 % |
8 % |
5 % |
1 % |
|
Dividend income from my pension has reduced |
4 % |
8 % |
3 % |
2 % |
|
I’ve had to reduce the amount I am withdrawing from my pension |
3 % |
6 % |
3 % |
1 % |
|
Other |
4 % |
3 % |
4 % |
4 % |
|
NA – I have not experienced a drop in income |
61 % |
47 % |
55 % |
77 % |
|
NET: Has experienced a drop in income |
39 % |
53 % |
45 % |
23 % |
|
Which, if any, of the following debt have you taken on during the COVID-19 crisis? |
||||
|
|
|
Age group |
||
|
|
Total |
18-34 |
35-54 |
55+ |
|
Credit card |
10 % |
14 % |
14 % |
4 % |
|
Bank overdraft |
7 % |
11 % |
9 % |
2 % |
|
Loan from family |
6 % |
12 % |
5 % |
1 % |
|
Loan from friends |
4 % |
8 % |
4 % |
1 % |
|
New mortgage |
3 % |
6 % |
3 % |
0 % |
|
Pay day loan |
3 % |
6 % |
3 % |
1 % |
|
Increased mortgage |
3 % |
6 % |
3 % |
0 % |
|
Other |
0 % |
0 % |
0 % |
0 % |
|
NA – I have not taken on any debt |
79 % |
65 % |
75 % |
93 % |
|
NET: Has taken on debt |
21 % |
35 % |
25 % |
7 % |
|
How concerned are you about experiencing financial difficulties during the COVID-19 crisis? |
||||
|
|
|
Age group |
||
|
|
Total |
18-34 |
35-54 |
55+ |
|
I have already experienced financial difficulties |
7 % |
8 % |
9 % |
3 % |
|
Very concerned |
21 % |
33 % |
24 % |
9 % |
|
Slightly concerned |
32 % |
33 % |
37 % |
26 % |
|
Not very concerned |
24 % |
17 % |
20 % |
33 % |
|
Not at all concerned |
17 % |
9 % |
10 % |
29 % |
|
NET: Concerned |
52 % |
66 % |
61 % |
35 % |
|
NET: Not concerned |
41 % |
26 % |
30 % |
62 % |
