The number of households reporting a negative financial impact shows improvement from a month ago, according to research from TransUnion
Research from global information and insights provider TransUnion tracking the financial impact of the ongoing COVID-19 pandemic showed consumer optimism improving as the second national lockdown came to an end. Four in 10 (42%) UK households are now somewhat optimistic about their financial future, an increase of 14% compared with a month earlier.
The number of households reporting a negative financial impact also shows slight improvement from a month ago but stands at 50%, highlighting the split between those hard hit and those who have been able to weather the pandemic, in some cases with little financial impact.
For those that are struggling, mostly due to reduced working hours or job losses, the ability to pay bills remains a significant worry, with nearly two thirds (65%) expressing concern. Credit card bills are the most commonly cited (39%), closely followed by utilities (38%) and rent payments (29%). The average expected shortfall is £585.
Yet, at the other end of the spectrum, a quarter of UK households report that they are now financially better off than anticipated at the beginning of 2020, whilst a further 37% are finishing the year in the financial position they had anticipated.
Satrajit “Satty” Saha, CEO of TransUnion in the UK said: Our Financial Hardship Study has tracked the impact of the pandemic on consumer finances since March and as we come to the end of 2020 the figures indicate a mixed picture. Those who expect to be unable to pay their bills envisage this happening in the next six to seven weeks, at the end of January, so businesses should be preparing for this and tailoring plans to help customers that are in difficulty. I’m heartened to see that the number of companies reaching out to explain payment options has almost doubled since our study began in March, now 41% versus 22%.
However, six out of 10 (61%) households are where they expected to be, or better off in many cases, with the radical lifestyle changes we’ve faced this year bringing cost savings on things like petrol, holidays, sports and socialising. This divide may be something that widens further in the months ahead, when government support schemes come to end, he said.