Nearly half of Britons are ‘living comfortably’ even in the midst of a pandemic, according to a report from YouGov. Though this means that more than half of the country’s citizens are facing some form of financial discomfort, it’s reassuring to find out that a good number of British people are coping well with their finances.
Let’s dig deeper into this issue and explore the financial pressures of the coronavirus pandemic and how the British are coping with their finances.
How well are the British coping with their finances?
YouGov reports that 48% of Brits are still ‘living comfortably’. That said, 33% report that they are not living comfortably but are coping, while 12% say that they are finding their financial circumstances ‘a little difficult’.
Worryingly, 5% of Britons report that they are ‘finding it very difficult’ financially. A small number (5%) ‘don’t know’ exactly how they are coping.
How has coronavirus affected our finances?
Coronavirus has affected nearly every aspect of our daily lives and our personal finances are no exception.
A significant number of British people have been furloughed or made redundant. Others have seen their working hours and wages significantly reduced.
Small business owners have not been spared either. Many have been forced to shut down their businesses. Others are now operating under stringent rules, leading to significantly less trade.
The only silver lining has been an extensive government support scheme for those negatively affected by coronavirus. This has provided much-needed financial help, especially to people who’ve been laid off or who’ve had their salaries reduced.
What strategies have the British been using to cope with their finances?
Despite the hard economic times ushered in by coronavirus, the British have shown commendable resilience when it comes to their finances. This is perhaps 48% are able to report that they’re ‘living comfortably’ despite the financial pressures of the pandemic.
For example, income uncertainty has forced many to adjust their spending habits. More people are cutting back on non-essential spending and being more attentive to where their money is going.
Some people have been coping by engaging in side hustles to supplement their current income.
Others have also been very proactive in terms of checking and applying for the wide variety of support that’s available from the government, such as the Job Support Scheme, Universal Credit, Pension Credit and others.
Also, lockdowns mean that people aren’t going out as much, and this has enabled them to save more money. The good thing with savings is that if you don’t need the money right away, you can invest it and see it grow.
Interest rates on savings accounts are the lowest they have ever been, so there might not be much returns there. There is, however, great potential for growth in a stocks and shares ISA. Of course, investing in stocks comes with a degree of risk but if you can tolerate the risk, you may find yourself making significant gains in the long term.
Unfortunately, some people have been forced to dig into their savings and emergency funds to cope. Others are having to take up more credit. But even getting approval for credit cards and loans is becoming harder as lenders tighten their belts due to the current economic climate.
It has truly been a challenging time.
Your finances and the future
Despite the economic challenges of coronavirus, the good news is that a good percentage of the British are at least coping well with their finances. The bad news is that there’s no sign yet of recovery for the economy. Some project that it will actually not recover to its pre-pandemic levels until mid-2023.
It goes without saying that if you are finding it financially difficult in the current economic climate, your financial problems are not likely to disappear overnight. That doesn’t mean that you cannot take steps right now to protect your finances and prepare for whatever lies ahead.
Our Coronavirus money guide contains a wealth of useful tips that can help you prepare financially for the unknown future.
