Over 9 million households having to make do with less money coming in
as a result of COVID-19
- 10% of households concerned about paying mortgage or rent;
- Only around 20% of struggling households have requested or received payment holidays or an overdraft buffer;
- 8% are having to use a credit card to pay for essentials including groceries;
- 2m households are seriously worried about their financial future;
- Help is available – GoCompare urges people to talk to their bank, landlord, credit card provider and take steps to reduce outgoings.
The UK’s COVID-19 lockdown measures have left a third (33%) of households struggling on reduced income,
according to new research from comparison site GoCompare.1
Lockdown restrictions have left millions of UK households concerned about jobs and meeting everyday financial commitments, including mortgage or rent payments, paying household bills and repaying debts.
While the UK government has put in place measures to help those affected, many people haven’t sought help either because they didn’t know they could ask or because they don’t believe banks, lenders, landlords or utility providers will help them.
The research looked at how the coronavirus lockdown has impacted people’s work and personal finances. The study was commissioned by GoCompare, who are urging anyone in difficulties to seek help as soon as possible.
Work and income
- One in five (21%) of UK adults are now working from home,
- 12% have been furloughed,
- 4% say they have lost their job,
- 8% are concerned they will lose their job,
- A third (33%) of households have seen their income reduce,
- 15% have experienced a severe drop in their finances,
- A fifth (19%) have had to make an emergency budget in a bid to manage their way through the lockdown.
As a result of the drop in their income, 10% of those surveyed said they were concerned about going overdrawn, 8% are having to use a credit card to pay for essentials including groceries, and 6% are borrowing money from friends and family.
Mortgage and rent payments
Meeting mortgage or rent payments were a key concern for one on ten (10%) of those surveyed, but only a quarter (23%) of these people had contacted their lender or landlord to discuss the issue and arrange a payment holiday. Worryingly, two in five (40%) said they hadn’t been in contact with their lender or landlord because they didn’t know they could ask for help or didn’t think help would be forthcoming.
Loans and credit card payments
14% of UK households are worried about repaying existing loans and credit card spending as a result of the Coronavirus pandemic. Of those:
- 26% have been in contact with their lender,
- 21% have received a payment holiday,
- Just under half (49%) hadn’t contacted their lender because they were unaware of the help available or didn’t think they would be able to access it.
Bank overdrafts
Of those concerned about going overdrawn, only a fifth had contacted their bank for help and requested or received an overdraft buffer. Almost half (47%) hadn’t contacted their bank because they didn’t know help was available or didn’t think help would be forthcoming.
Utility and council tax bills
The survey found that only a handful of those who had lost income as a result of the Coronavirus crisis have sought help with essential bills – only 10% have spoken to their utility providers to make more affordable payment arrangements, while 12% had arranged a council tax reduction or more affordable payments.
If you are experiencing financial difficulties, take action as soon as possible:
- Draw up a budget based on your new income and outgoings and stick to it;
- Talk to your mortgage provider or landlord as soon as possible to agree on a payment holiday or new repayment plan;
- Shop-around for a better deal for essential services and insurance such as energy, car and home insurance;
- Talk to your bank about an agreed overdraft and an interest-free overdraft buffer;
- Talk to your credit card, loan or car finance provider to see what help is available in terms of a payment holiday or a new repayment plan;
- The government has made it easier for people to access benefits and claim sick pay. Check what benefits you could be entitled to.
Lee Griffin, CEO and one of the founders of GoCompare, commented, “Millions of people are experiencing a sudden drop in income as a result of the Coronavirus. With no certainty on when the lockdown measures will be lifted, people are understandably worried about how they will make ends meet. But there is help available.
“If you’re struggling with your finances now or think you will soon, don’t ignore the problem in the hope it will go away. Check to see what benefits you are entitled to and find out how to access them and if you’re having difficulty in making payments or repaying loans, contact the relevant organisation as soon as possible to make more affordable arrangements.
“And don’t forget that you can take control of your outgoings too. For example, never let existing contracts for things like car insurance, home insurance, energy or broadband renew without first seeing if you can get a better deal elsewhere. Switching can save you hundreds of pounds a year (e.g. £283 on car insurance, £102 on home insurance and £476 on energy**) and you don’t need to sacrifice quality to get the peace of mind you deserve.”
For more information on Coronavirus and your money visit: https://www.gocompare.com/coronavirus-insurance-money/