The number of families with children at home who are struggling to pay their bills during lockdown has leapt to its highest level.
According to comparethemarket.com’s Household Financial Confidence Tracker, 30% of parents with children at home found it difficult to meet their financial obligations over the past seven days. This represents a seven percentage point rise from last week (23%) and the highest level recorded since the Tracker began ten weeks ago. Mirroring this spike in financial anxiety, the proportion of families with children at home who say they are not confident that they will be able to make ends meet over the coming weeks jumped to 27%, up from 23% last week.
UK households clearly believe that the damage done to their personal finances as a result of the coronavirus pandemic will take a considerable amount of time to repair. Nearly four in ten (38%) households feel their finances have suffered since the beginning of lockdown and, among this group, respondents said that it would take an average of nine months to get back on track financially.
In order to get their finances on an even keel once again, many people are needing to make meaningful lifestyle changes, with 44% expecting that the way that they manage household finances will change as a result of pandemic..43% of households say they will make an active effort to try and save more money – a figure which jumps to 51% amongst families with children at home.
Whilst 29% of households will reduce the number of luxuries or discretionary items they buy – jumping to 35% amongst families with children at home and 18% of households will make an effort to use less petrol – rising to 22% amongst families with children at home
As lockdown measures are eased, a substantial proportion of households will emerge with fewer savings and higher debt levels, and families with children at home are once again hit the hardest. 28% have dipped into savings (compared with 23% without children at home) and 12% have taken on more debt (versus 5% without children at home) in order to make ends meet over the past few months.
Anna McEntee, product director at comparethemarket.com, said “The lockdown has had a profound impact on society and has clearly altered the shape of our personal finances. Many household budgets will be changed dramatically for the long term, with many people forced to make financial sacrifices and adapt how they spend. Households expect it to take the best part of a year before their finances return to how they were before lockdown. As the furlough scheme is slowly wound down, businesses will come under further financial pressure which could have a knock on effect on their employees. Even though this phase of lockdown is coming to a close, the second half of 2020 promises to be a real challenge for many people.”