Research from Indesser, a joint debt management venture between the Cabinet Office and TDX Group, shows 39% of people’s finances have been negatively affected by the COVID-19 pandemic, with Gen Zers feeling the sharpest impact (44%).
The survey reveals the toll of the pandemic on people’s sense of financial stability, with 43% admitting they worry everyday about their finances.
A clear pattern from the findings is the disproportionate impact of COVID-19 on the personal finances of younger people. Nearly one third of respondents overall (31%) said they may be unable to pay bills or make debt repayments. This figure drops dramatically for those aged 65+ (3%), and significantly rises for the 18-24 (38%), 25-34 (39%) and 35-44 (41%) year old categories.
A sizeable proportion of people have already fallen behind on repayments, with 12% in arrears on their mobile phone bill, 9% on their water bill and 8% behind on mortgage or rent. The situation will become more challenging as we move through autumn, with many more people expecting to go into arrears on their mobile phone bill (19%), water bill (18%) and mortgage or rent (18%).
While 40% of people overall stated they had three months of expenses saved up, this figure drops to 32% for both the 18-24 and 25-34 year olds categories, in stark contrast to 69% for those 65 and over.
Richard Haymes, Director of Consumer Affairs at Indesser, said: “Our survey evidences just how concerning and complex the financial impact of COVID-19 has been for millions of people across the UK. Age is a major determinant, especially when it comes to the likelihood of falling into arrears on debt, both now and in the future. Over nine million people have been placed on furlough and 695,000 jobs were lost between March and August, with 16-24 year olds hardest hit. Economic uncertainty and disruption will continue for some time, with detrimental consequences for many.
“People falling behind on bills and repayments will need support, empathy and compassion from their creditors. It’s more important than ever that individual circumstances are taken into account and data utilised when assessing people’s financial situations. Developing tailored repayment and debt recovery plans will result in better outcomes and more responsive customers.”