The pandemic has wrought havoc on people’s mental health and personal finances with a quarter of the UK population expecting their finances to worsen over the next three months, according to LV=.
Research of 4,000 adults conducted by Opinium for LV=’s Wealth and Wellbeing Index found that as of December, 25% of UK adults said they expected their finances to worsen over the quarter – the worst figures since December 2020.
The findings also showed a third said their finances had deteriorated over the past three months, 48% claimed their total monthly outgoings had increased while only 9% said they had decreased. Two in 10 also admitted the amount they are saving has fallen.
Clive Bolton, managing director of protection, savings and retirement at LV=, said: “The Covid-19 pandemic has been incredibly difficult for the nation and had a huge impact on the lives, personal finances and mental health of millions of people.
“Consumer sentiment had been steadily improving between spring and early autumn 2021 as the success of the vaccine programme, fall in death rates and easing of lockdown restrictions allowed life to begin to return to normal.
“However, the appearance of the Omicron variant and rising infection levels has knocked confidence back to levels last seen in the dark days of December 2020.”
Inflation a growing concern
“Inflation is becoming more of a problem for many people who say their outgoings have increased, particularly those who are retired. Rising prices coupled with poor returns on deposit accounts will dismay pensioners whose only or main source of retirement income is the state pension,” Bolton continued.
“Many will be financially squeezed as the cost of essential items like home heating rise while returns from savings accounts – which typically form the bulk of retired people’s savings – remain low.”
Bolton also noted that the economy remained relatively strong and wages were rising for those people whose jobs have been unaffected by lockdowns.
“Millions of people have endured a difficult Christmas and New Year but hopefully the current booster vaccine programme will be successful and confidence will return as the virus comes under control,” he added.