Around one in eight suffered financial damage during Covid

Advisers believe 12% of their clients have taken a financial hit because of the impact of the pandemic, according to The Openwork Partnership

Advisers estimate around one in eight clients have suffered financial damage during the Covid-19 pandemic, according to new research from The Openwork Partnership.

Its nationwide study found that advisers on average believe 12% of their clients have taken a financial hit because of the impact of the pandemic with just 8% of advisers saying none of their clients have been adversely impacted.

The biggest issue advisers have seen is clients stopping saving or investing during the pandemic – 48% of advisers say they have clients who have done that – while 32% say they have clients who have run down savings during the pandemic.

19% of advisers say they have clients who have taken money out of pension funds to tide them over during the crisis while 31% of advisers say they have clients who have taken tax-free lump sums from pensions earlier than planned.

HMRC data shows around 1.778 million people have withdrawn £12.04 billion in flexible payments from pensions between January 1sts 2020 and March 31st, 2021, during the pandemic with average withdrawals in the first three months of this year at around £6,800, slightly down on the same period in 2020.

Around 27% of advisers say clients have sold investments while 5% say clients have sold buy-to-lets and 4% say clients have downsized to smaller homes.

41% of advisers say they have seen a rise in clients taking money out of investments to help themselves or family members.

Mike Morrow, chief commercial officer at The Openwork Partnership, said: It’s been a tough year financially for millions of people despite unprecedented levels of Government help and advisers are seeing the impact on the ground.

Of course, many people have benefited financially during the crisis with more money going into savings but one in eight clients on average suffering losses is bad news and particularly so when people are taking money out of long-term investments to keep going in the short-term, he said.

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of Getting Money Wise. The information provided on Getting Money Wise is intended for informational purposes only. Getting Money Wise is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

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