Two fifths of Brits were not financially prepared for the pandemic
- Nearly 4 in 10 (37 per cent) of Brits say they weren’t financially prepared for the Coronavirus pandemic.
- Nearly a quarter (23 per cent) needed to turn to alternative methods for financial support, and a fifth of those needed to borrow between £5,000 and £30,000.
- A third admit that the pandemic has made them think about their finances more seriously, with 37 per cent now likely to revamp their finances.
- But over half (51 per cent) managed to save money.
- The findings come as Good Money Week (24th – 30th Oct) launches its 2020 campaign to raise awareness of the importance of green and ethical finance in the wake of the Coronavirus pandemic, with this year’s theme ‘Clean Slate Green Slate’.
New research from YouGov and Good Money Week - which runs from 24th-30th October 2020 to raise awareness of ethical finance - has shed light on how prepared Brits were as individuals for the economic fallout of the pandemic, and how it has changed their atitudes to their personal finance matters.
MANY WERE NOT PREPARED
According to the poll of 1,623 UK adults, nearly 40 per cent (37 per cent) of Brits admit that they were not financially prepared for the Coronavirus pandemic. Nearly a quarter (23 per cent) have had to use alternative methods for financial support since the start of the pandemic, with 25-34-year olds hit hardest (36 per cent) out of all the age groups, and the 65+ age group least likely to need to source alternative help (9 per cent). 12 per cent of Brits needed to resort to credit cards, 8 per cent to an overdraft, and the same percentage borrowed money from family or friends. Looking at amounts borrowed, nearly two thirds (61 per cent) borrowed £5,000 and under, with nearly a fifth (18 per cent) borrowing amounts ranging from £5,000 to £30,000.
THE IMPACT OF FURLOUGH ENDING
Respondents were also quizzed on the impact to them personally of the imminent ending (31st October) of the Coronavirus Job Retention Scheme, which has subsidised the wages of nearly 10 million furloughed workers since mid-March. 1 in 10 (10 per cent) say they will be financially impacted by it ending, but this figure nearly doubles to 19 per cent for the 18-24- year old age group, who are the most likely to be affected.
THE PERSONAL FINANCE WAKE-UP CALL
It’s no surprise then that many Brits have had a personal finance wake-up call in recent months; a third of Brits (33 per cent) admit that the Coronavirus pandemic has made them think about their finances more seriously, with women more likely than men to feel those aftereffects (37 per cent of women vs. 28 per cent of men.) And looking ahead, 37 per cent of Brits are now likely to revamp their finances as a result. 60 per cent said they are planning to cut back on non-essential spending, and just under a quarter (23 per cent) are looking to invest their money, with the same amount likely to start a new savings account, whilst over 10 per cent (11) are planning to switch bank accounts.
BUT THE MAJORITY DID SAVE MONEY
However, despite the economic downturn and job losses owing to the pandemic, over half of Brits (51 per cent) have actually managed to save money during the pandemic, with the 65+ age group faring best (64 per cent). And in more good news, there has been an uplift in people being more likely to shop ethically. However, this isn’t translating into how they deal with their personal finances.
Despite 30 per cent of Brits saying they are now much more likely (compared to last year) to actively choose products and services based on their positive environmental or social impact, only 5 per cent of those who saved money would consider investing it with a positive impact or ethical investment platform.
ENVIRONMENT STILL HIGH ON THE AGENDA
The theme for this year’s Good Money Week is ‘Clean Slate Green Slate’, encouraging people to consider environmental impact of their money as they start afresh and revamp their finances. And the good news is that that this year’s survey results show that environment is clearly high on the agenda for many Brits, as over half (51 per cent) of the nation agree that the Government should prioritise lowering carbon emissions when “building back better” from the Coronavirus pandemic, even if it takes longer.
This view was also evident when respondents were asked which key public figures they think represent the ethics or values they'd like to see more of in Britain if or when it ‘builds back better’. Natural historian and pioneer David Agenborough (74 percent) was the top choice, followed by Swedish environmental activist Greta Thunberg (44 per cent). 39 per cent chose Marcus Rashford, who this year successfully campaigned the Government to extend the school meal voucher scheme for the summer holidays. Separately, only 24% of respondents said Boris Johnson does represent the values and ethics they’d like to see more of in Britain, if or when, it builds back better.
Charlene Cranny, Good Money Week Campaigns and Communications Director, said: “This pandemic has been a wake-up call for many of us in many different senses, but especially when it comes to our finances. That’s why the theme of this year’s Good Money Week is ‘Clean Slate Green Slate’, encouraging people to consider green options as they start afresh with their finances. As 37 per cent of Brits are now likely to revamp their finances as a result of this wake-up call, we would love to see more people considering ethical and green options for bank accounts and investing a little bit of cash into something green and sustainable.
“As our country attempts to “build back better”, there has never been a more important time to think about the social and environmental impact of our money and protecting our future wealth. We would particularly urge the 51 per cent of Brits who were fortunate enough to save money to consider ethical investing. They’ll invest at a time when the country and society needs it most – and they’ll be glad to hear that ethical and sustainable investments regularly outperform the others too.
“Only 15 per cent of Brits surveyed said they knew what ethical investing means, so there is clearly a job to be done here on educating the public on the benefits of ethical, sustainable and green finances. It can divert money away from companies that are guilty of reckless and irresponsible behaviour when it comes to the environment, human rights and equality, and instead you can choose to invest in funds that will have a positive impact on those things.
“Investing is not just for people with thousands to invest; you can start now by investing as little as £5 a month in an ethical fund that will help society and environment at a time when it needs it the most as well as ensure you have something to fall back on during unprecedented times like these. Double win!”
For more informaIon on Good Money Week, to use its ‘Clean Slate Green Slate’ quiz and to download your free guide to green and clean finance head to www.goodmoneyweek.com.
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All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 1,623 adults. Fieldwork was undertaken between 23rd - 24th September 2020. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).