Young people are finding it increasingly difficult to pay their bills, as the economic impact of COVID-19 continues to hit household finances and the wider economy. According to the third week of comparethemarket.com’s Household Financial Confidence Tracker, a quarter (25%) of those aged 18 to 24 struggled to make ends meet over the last week – the highest of any demographic – jumping from 16% the week before. By contrast, the proportion of households nationwide who found it difficult to pay their bills has remained flat at around 17%.
Worries over affording household bills in the coming weeks were expressed by more young people than other demographics; a quarter (25%) of 18-24-year-olds said they would struggle to pay their bills in the coming weeks, a sharp rise from 17% who expressed concern last week. By contrast, the proportion nationwide who are not confident that they will be able to keep on top of payments in the coming weeks has remained at one in five (20%) for the third week in a row.
When asked why they were not confident that they would be able to pay or manage household bills over the coming weeks, nearly six in ten (59%) young people said it was because their working circumstances have changed for the worse – for example they had been furloughed, lost their job or taken a pay cut. Only one in ten (10%) say that the government has announced measures which should support them financially.
Younger people appear to be worse affected by company cost cutting measures than older age groups. Amongst the general population, the number who say their working circumstances have changed for the worse fell from 45% to 39% over the past seven days.
Families with children at home continue to find it harder to meet their household financial demands than those without. The proportion of parents with children at home who said it was “difficult” to pay their bills over the last seven days ticked up to 28% from 26%, compared to 13% of those households without children at home (a fall from 15%). The number of families with children who were worried about being able to pay their bills in the coming weeks rose by one percentage point to 29%, compared with a fall of one percentage point to 16% amongst those without children at home.
Significantly, over half (55%) of those with children at home think that the economic impact of the pandemic will have a long-term impact on their finances, versus 42% of those without children at home. Over a quarter (29%) of families with children think COVID-19 will cause them to make financial sacrifices for up to year, compared to a fifth (20%) of those without additional mouths to feed and people to take care of.
The number of people who say that they would not be confident visiting cafes, bars and pubs once they reopen has risen for the third week in a row. Whilst the Prime Minister has announced a road map to opening up the economy, nearly half (48%) of UK households say they do not wish to visit public places, up from 43% last week and 39% the week before. The main reason for this hesitancy, cited by 41%, is that they would not feel in control of their surroundings and would therefore not enjoy themselves – a rise from 34% who gave this reason last week.
Anna McEntee, product director at comparethemarket.com, said “The financial impact of Covid-19 is not felt equally. Over the last three weeks, we have seen families with children at home find it more and more difficult to meet their financial demands whilst, for those without, there are some tiny signs that financial concerns may be easing. A financial anxiety gap is emerging between those with dependents at home and those who do not have extra mouths to feed.”
“The sharpest rise in financial hardship linked to the coronavirus is being experienced by young people. Their ability to pay their bills has declined over the past three weeks and their concern about being able to do so in future has jumped. The indication is that they have been hit very hard by decisions to cut pay, make redundancies or furlough staff, with 59% of 18-24 year olds who said that were not confident about their household finances citing that their employment prospects have changed for the worse.”
“The government has announced a road map to reopen the country, but the proportion of people who would not feel comfortable visiting pubs, cafes and restaurants has increased steadily for three weeks now, as many people say they would not feel comfortable in these surroundings. The Government may have a plan, but it is going to take a lot of convincing to get the nation on board.”