The coronavirus (COVID-19) pandemic has not only dealt a blow to the UK economy but many people and families have also unfortunately experienced financial hardship. According to a recent survey, 31% of the population say they are struggling with their finances due to the effects of the pandemic[1].

With the pandemic causing many workers to lose working hours or their jobs, it’s more important than ever to know what financial options you have.

Under-35s are most likely to borrow

But the survey shows that the impact is not spread evenly. It appears that people aged 18-35 have experienced the most financial difficulty and are most likely to seek help from others.

During the pandemic, 18-35s have been 4 times more likely than other age groups to receive financial support from their family or friends. They’ve also been twice as likely as other age groups to take out a loan to make ends meet.

People aged 35-55 have been impacted less

Those in the 35-55 age group have been less likely to need to borrow than the under-35s. They’ve also less likely to report a worsening of their financial situation than those aged 55-65. But that’s not to say that they have it easy. Nearly one in three people in this age group say their finances are worse now.

People aged 55-65 have their retirement plans disrupted

Many people in the 55-64 age group may have had to change their retirement plans. Income from work for one in four of these people has fallen 40%. A rise in unemployment has led to increasing numbers of people taking early retirement. Some relying on their property wealth to fund this.

Over-65s are supporting their families

Over-65s have been less affected than the general population, with 17% reporting that they are struggling financially. This is likely due to their pension income, which, in a lot of cases, will have remained level. More than one in ten of those aged over 65 say they have offered financial support to family members, which is the highest of any age group.

Before providing help to younger family members, it’s important to make sure that you can afford to without affecting your standard of living. Consider how your costs might rise later in life and ensure that you retain enough wealth to cover these additional expenses.

Support is still available if you, your family or your business need it

In response to the impact of coronavirus, the government agreed to a raft of measures with providers across a range of sectors to ensure struggling consumers are treated fairly. For those still worried about paying utility bills or repaying credit cards, loans or mortgages, support is still available.

People struggling to pay essential bills are encouraged to:
  1. Contact providers – contact your providers to explain the situation and receive help
  2. Ask for help if it is needed – free advice is available. Coronavirus has affected the entire nation and many people need support now, even if they never have before
  3. Explore payment options – it is better to agree on a payment plan with your provider/s. Keep making regular instalments, rather than cancelling direct debits and letting debt build

If you think your financial position is affecting your mental health there is always help available:

StepChange
Manchester Mind
The Money Charity
Samaritans
Mental Health Foundation

We also offer a free one hour consultation, please get in touch here.

For more information or to discuss any of the issues raised in this article, please contact your adviser, or call us directly on 0161 819 1131. Further information can also be found at gov.uk.

Source data: [1] https://www.lv.com/about-us/press/coronavirus-outbreak-leaves-young-people-turning-to-bank-of-gran-and-grandad

Personal circumstances differ and not all of this information is applicable to every client and/or their business, this information is general in nature and should not be relied upon without seeking specific professional financial advice.

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