Research from Indesser, a joint debt management venture between the Cabinet Office and TDX Group, shows 39 per cent of people’s finances have been negatively affected by the COVID-19 pandemic, with Gen Zers feeling the sharpest impact (44 per cent).
The survey reveals the toll of the pandemic on people’s sense of financial stability, with 43 per cent admitting they worry everyday about their finances.
A clear pattern from the findings is the disproportionate impact of COVID-19 on the personal finances of younger people. Nearly one third of respondents overall (31 per cent) said they may be unable to pay bills or make debt repayments. This figure drops dramatically for those aged 65+ (3 per cent), and significantly rises for the 18-24 (38 per cent), 25-34 (39 per cent) and 35-44 (41 per cent) year old categories.
A sizeable proportion of people have already fallen behind on repayments, with 12 per cent in arrears on their mobile phone bill, 9 per cent on their water bill and 8 per cent behind on mortgage or rent. The situation will become more challenging as we move through autumn, with many more people expecting to go into arrears on their mobile phone bill (19 per cent), water bill (18 per cent) and mortgage or rent (18 per cent).
While 40 per cent of people overall stated they had three months of expenses saved up, this figure drops to 32 per cent for both the 18-24 and 25-34 year olds categories, in stark contrast to 69 per cent for those 65 and over.
Richard Haymes, director of Consumer Affairs at Indesser, said: “Our survey evidences just how concerning and complex the financial impact of COVID-19 has been for millions of people across the UK. Age is a major determinant, especially when it comes to the likelihood of falling into arrears on debt, both now and in the future. Over nine million people have been placed on furlough and 695,000 jobs were lost between March and August, with 16-24 year olds hardest hit. Economic uncertainty and disruption will continue for some time, with detrimental consequences for many.
“People falling behind on bills and repayments will need support, empathy and compassion from their creditors. It’s more important than ever that individual circumstances are taken into account and data utilised when assessing people’s financial situations. Developing tailored repayment and debt recovery plans will result in better outcomes and more responsive customers.”