Even before the Coronavirus pandemic, the economy was volatile and squeezed. Household debt in the UK was the second highest among the G7 countries, and people were borrowing to facilitate their lifestyles with few households able to save. There was an increase in buy now pay later mentality, a reliance on the bank of mum and dad and strained affordability amongst consumers. Then the unprecedented happened and Covid-19 struck, consuming the headlines, turning our lives upside down and causing economic growth to instantly stop.
As we transition into 2021; we do so as a very different economy. People are working from home, demand has changed, performance has changed, online activity has exploded, and whilst there are pockets of resilience, there are growing risks. Covid-19, climate risk and digitisation have influenced how we spend, save and borrow. Understanding these changes and the causes is key for credit providers as we all adapt to the new norm.
Experian’s award-winning data scientists and economists have been tracking this change. Covering depth of detail that can help provide as greater view of what’s happened, what’s happening now, the causes and what this will mean. Experian’s new report provides a detailed view of the new credit economy. It delves into their unrivalled data sources to uncover the true reality, of reality. It looks at how things have changed, the causes, and what is short- or long-term change.
The paper is broken into four sections:
- The immediate economic impacts of the pandemic and the UK Governments response measures
- Impact on consumers attitudes and bahaviours – personal finances, spending and borrowing, payment trends and digital adoption
- The new normal – what the world looks like now and the outlook
- How the risk profile of the nation has changed and the implications for lenders
Andy Wills, Director of Data Insight, Experian