Coronavirus and the UK’s Financial Wellbeing
The team at PayPlan conducted a survey to find out how people in debt have been affected during the Coronavirus outbreak. The aim was to learn from the experiences of people in debt to ensure they continued to receive the best financial advice and support going forward.
The Coronavirus and Financial Wellbeing Survey
Over 1,000 people took part in the survey; they shared how their financial wellbeing has been impacted during Coronavirus, and what their thoughts are for the future. Read on to find out what people are really thinking right now and where to get free advice.
Key learnings from our survey
How confident are people about repaying their debts?
The survey found that a staggering 74% of those currently behind with their loan and credit card payments don’t feel confident that they’ll be able to repay their debts when their income returns to normal. Many people have been furloughed or lost their job which means they are currently unable to repay their creditors on time and in full.
The majority of people are unsure if their job is safe or if they will remain on a reduced income in the coming months. Coronavirus has put a lot of businesses under extraordinary levels of pressure – particularly those in the hospitality and retail sectors – and as a result of a reduction in income, people have less money to pay towards essential costs, which means some debts don’t get paid.
It’s worth looking at budgeting guides and making a list of your income and outgoings to ensure you can afford your day-to-day expenses. This means you’ll have a clear idea of where savings can be made and how much you can put towards clearing your debts.
How do furloughed employees feel now?
PayPlan found that 61% of furloughed employees don’t feel their job is secure right now. It remains to be seen how people’s jobs will be impacted; non-essential retail outlets have just opened their doors, and the hospitality sector could be gradually reopened from July. However, many people are in the dark about whether their job is safe and if there will be further lockdowns in the future.
The furlough scheme has been extended until October 2020, but employers will soon be required to start contributing to wages to make-up the 80% pay. This may force some employers to make redundancies as they may not be able to afford to pay wages while business is slow and outstanding bills need to be paid.
If you have been furloughed and are unable to keep up with your priority debts, you should speak to your lenders to see how they can help, or you should seek professional debt advice.
What are people’s attitudes to debt right now?
64% view paying back their debt as a priority right now. This is a promising sign, as the majority of people are aware of how important paying debts is, particularly priority debts like a mortgage.
Failure to pay back secured debts could result in the repossession of property and other assets, so it’s important you understand what priority and non-priority debts are to ensure you get through the Coronavirus outbreak in the best financial shape possible.
PayPlan encourages anyone who can pay back their debts to do so. This will have long-term benefits to ensure you don’t end up with large amounts of debt after the lockdown period has ended. However, if you cannot pay back your debts then you should seek help immediately from your lender or an impartial debt advice company.
Is Coronavirus to blame for debt?
The Coronavirus outbreak has caused businesses to stop trading and people to cease working. This income shock has contributed to the loss of jobs and reduction of income for so many, and 46% of people that sought debt help from PayPlan did so due to earning less money than before.
62% of people claimed that Coronavirus had a part to play in them seeking debt help, which is a clear indicator of how the virus has damaged the physical, emotional and financial wellbeing of so many.
What advice can you get if you’re struggling with your mental health?
These are uncertain times we live in and PayPlan’s survey shows that there are anxieties around financial wellbeing as a result of the virus. It’s important to seek professional help and support others who may be struggling at this time.
If you are struggling with your mental health, charities like Mind will be able to offer professional guidance and tips to help you through this difficult period. PayPlan debt advisers have all received vulnerability training and can refer you to support networks to get specialist assistance if required.
Need to talk?
If the Coronavirus outbreak has caused you to fall into financial difficulty, acting now will put you in the best position to getting your financial wellbeing back on track. PayPlan’s dedicated Debt and Coronavirus Help Hub will be able to answer any burning questions you may have at this difficult time.
To find out what support you can get as we come out of lockdown, speak to a PayPlan adviser for free today by calling 0800 280 2816 or visit www.payplan.com