Credit, Collections & Insolvency News
The rapid roll-out of coronavirus vaccines and declining case numbers have made many households optimistic about their financial prospects, according to the latest Household Financial Confidence Tracker from comparethemarket.com.
Nearly four fifths (79%) of households found paying their bills manageable over the past seven days and 82% are confident they will be able to meet the demands of their household finances over the coming weeks of lockdown. Over a third (38%) have managed to save money and a similar number (33%) have taken steps to cut down their household expenditure.
There is also pent up demand for life to go back to normal, as 59% plan to visit restaurants, cafes, pubs and cinemas as soon as they reopen, although 33% say they will only do so if social distancing continues to be enforced. Over one in ten (13%) will visit social spaces as soon as they can, even if the virus still presents a risk.
The Bank of England recently said the UK’s vaccination programme will help the economy bounce back sharply later this year towards levels seen before the crisis. However, this financial optimism is not yet trickling down to many families with children at home.
Nearly a third (30%) of families with children at home said they had struggled to pay their bills over the last week. In addition, 29% of families with children at home said they are worried about their ability to meet their financial obligations over the coming weeks – more than double the proportion (14%) of families without kids in the house who said they had the same concern.
Over a third (38%) of families with children at home have needed to increase household expenditure beyond normal spending levels as lockdown continues. A fifth (21%) of families with children have had to take time off work for childcare, home schooling, or to provide wider support to their household, which has also affected financial confidence levels.
Families with children at home have longer term concerns about their finances, even after lockdown lifts. The Furlough scheme, which is set to run until the end of April, has held back the tide on job losses but there are concerns around the impact if it is not extended for longer. Ahead of the Chancellor’s Budget next month, half (50%) of families with children at home say that if they or their partner were to lose their job as a result of the pandemic, they would struggle to pay their bills (compared to 31% of those families without children at home).
Ursula Gibbs, Director at comparethemarket.com, said “There is definitely a greater sense of optimism among many that life will soon return to some form of ‘normal’, given the vaccine roll out and falling infection level. However, that is not yet being reflected in the financial confidence of those with children to look after, but we may see this change as the world opens up again and finances begin to recover.”
“Worries around affording childcare and paying bills are still front of mind, given the wider impact of the pandemic. There are steps people can take to help manage their money day to day. Working out where to cut costs by switching household bills and taking advantage of reward cards and deals can often save hundreds of pounds. Small steps can make a big difference when it comes to budgeting.”