Half of UK households struggling to meet financial commitments

50% of UK households believe they will struggle to meet their financial commitments over the next three months.

These are the findings from a national COVID-19 financial impact tracker published by Standard Life Foundation that examines the financial consequences of the coronavirus pandemic.

Researchers questioned 6,500 people across the UK on how their personal and household finances have been affected by the crisis and the likely impact it will have over the coming months.

The latest findings suggest government support will go some way to mitigating income losses. Around four in 10 of those who had lost a substantial part of their income as a result of the crisis said that they expected to have some of their (or their partner’s) earned income replaced by the furlough scheme.

Looking to the near future, 28% of households anticipate some fall in income over the next three months. One in five have used credit to pay for food and other essentials during the crisis. But just One in 10 have sought financial or money advice.

The tracker found stark differences between different age groups; 6% of those in serious financial difficulty were retired, but this age group made up 44% of all those who were financially secure. There were also differences between family types: those with dependent children (especially lone parents) and single adults were more likely to be in financial difficulties; and couples with no children or adult children living with them were less likely to be in financial difficulties.

Alistair Darling, chair of Standard Life Foundation, said: ‘We know that whilst everyone will be affected by the virus we will not all be affected equally. This is shown by the disproportionate number of renters, disabled people, the self-employed, and those with dependent children in serious financial difficulty.

‘Not only do we need to ensure that the inequalities which existed before the pandemic are not made worse by it, the government needs to take action to deal with this growing problem by putting appropriate policies in place.’