• As the six-month anniversary of lockdown in the UK approaches this week (23 September), almost a quarter (24%) of women say they have been financially disadvantaged by the COVID-19 crisis compared to a fifth (20%) of men, new AJ Bell research reveals
• Overall, 22% of UK adults are financially worse off as a result of the pandemic - although 14% of people say they are better off
• Men who are worse off have on average lost out on £3,000 as a result of COVID-19, compared to £2,100 for women
• Lost employment income the primary driver of hardship, with 22% saying they have been furloughed, 19% pointing to a drop in their partner’s income and 14% having to take a pay cut
• Roughly 1-in-6 (17%) self-employed respondents said they had lost work during the first 6 months of lockdown
Tom Selby, senior analyst at AJ Bell, comments:
“It is staggering that we have been living in the surreal world of full or partial lockdown for half a year now. Shutting down large parts of the economy was always going to take its toll on people’s finances, but it is still worrying to see over a fifth of the country is worse off as a direct result of the pandemic.
“Although there is not a vast difference between the experience of the sexes, women are more likely to report being financially disadvantaged than men. This may reflect the fact that some of the sectors most hit by COVID-19 – in particular hospitality and retail – tend to employ significant numbers of women. Many women also work in low paid and often insecure jobs which may also leave them vulnerable to the effects of lockdown.
“The big concern now is whether that picture is going to get better any time soon. The Government is desperately trying to encourage people back to work but in some sectors that is proving very difficult and unemployment has started to creep up, albeit from a very low base.
“The danger is that this accelerates as the furlough scheme comes to an end next month. Furthermore, with the UK’s ‘R’ number above 1 and new local lockdowns instigated in the North of England, any thoughts that the virus’s spread is now under control are fast becoming a distant memory. If businesses are again forced to close, this will inevitably create further employment and financial uncertainty for millions of people.
“That said, six months into the pandemic it is not all doom and gloom, with the majority of people financially unaffected by lockdown and 14% actually better off than they were before lockdown.
“Some of that money will have sensibly been used to pay down debts, boost their cash savings buffers or top up long term savings. However, UK businesses also badly needs people to start spending some of that cash in order to keep the lights on.”
In detail – what AJ Bell’s COVID-19 survey found
As the six-month anniversary of lockdown in the UK approaches this week (23 September), a survey of 2,000 UK adults suggests just over a fifth (22%) are worse off financially than they were at the start of lockdown. People whose financial situation is worse due to lockdown estimate they are worse off by an average of £2,504.
Two fifths (39%) of people who are worse off as a result of lockdown attribute it to increased living costs such as higher bills and spending more money on food shopping.
However, some form of lost employment income is the primary driver with 22% of people saying they were furloughed, 19% saying their partner’s employment was affected, 17% being self-employed and lost work, and 14% having to take a pay cut.
Gender divide
Women are more likely to be financially disadvantaged by the COVID crisis, with 24% saying they are worse off compared to 20% of men.
However, men are on average £3,011 worse off compared to £2,107 for women and one-in-ten men say they are more than £10,000 down as a result of lockdown, compared to just 3% of women.
Around the UK
People living in the East of England (28%), East Midlands (27%) and West Midlands (27%) are most likely to be financially worse off as a result of lockdown, closely followed by Yorkshire and Humberside where 26% of people say they are worse off.
This compares to London and the South East where 18% of people are financially worse off since before lockdown.
Some people are better off
14% of people questioned said they are better off as a result of lockdown with 60% about the same as before lockdown. Those that are better off than before lockdown estimate they are better off by an average of £2,544, with this being highest amongst 18-34 year olds who are better off by an average of £2,788, compared to just £1,979 for those aged 55+.
The main saving for seven-in-ten (70%) of those that are better off has been on everyday expenses such as going out and driving less, while 37% have saved money on commuting and 28% have cancelled a holiday.
Research conducted by AJ Bell & Opinium in a nationally representative sample of 2,000 adults between 8 September – 11 September 2020.
