Fifth of people ‘do not think their finances will recover this year’

Vicky Shaw, PA Personal Finance Correspondent
·2 min read

One in five people believe they will be unable to recover financially this year from the impact of Covid-19, a survey has found.

Some 20% of people think they will not be able to get their finances back on track in 2020.

Nearly two-fifths (39%) agree they feel “terrified” at the financial impact that another potential major lockdown would have, rising to 46% of people who have been furloughed.

The research also found that 17% of people have used up all of their emergency savings and more than a fifth (21%) are relying on credit to get by.

The survey was carried out between July 7 and 10 for Open Up 2020, an initiative run by Nesta Challenges, which aims to boost awareness of financial products made possible by “open banking” technology.

Open banking allows different providers to securely share information about a customer, helping them to access new apps and other ways to manage their money in a way that suits them.

More than a third (36%) of people said they feel more comfortable using money management apps since the lockdown started in March, the survey of 2,000 people across the UK found.

One in six (16%) people feel they are living “on the breadline”, a sentiment which was also higher among those on furlough, with more than a quarter (26%) feeling this way.

Higher earners were particularly likely to say they were feeling an impact.

More than a third (34%) of those earning more than £50,000 a year said they currently feel as if they are living on the breadline, potentially due to their existing financial commitments and there being limits on the amounts of lost income that furlough payments will cover.

With many people already feeling the pinch, one in five (20%) people are concerned their finances would not be able to endure another major spike in coronavirus cases, rising to 34% of 25-to-34-year-olds and 43% among those earning more than £50,000.

Some 17% of people believe they will have to delay their retirement plans due to the virus, rising to more than half (53%) of those earning more than £50,000.

More information on Open Up 2020 is available atopenup2020.org/explore-the-open-banking-apps.