- 10% of households concerned about paying mortgage or rent;
- Only around 20% of struggling households have requested or received payment holidays or an overdraft buffer;
- 8% are having to use a credit card to pay for essentials including groceries;
- 2m households are seriously worried about their financial future;
- Help is available – GoCompare urges people to talk to their bank, landlord, credit card provider and take steps to reduce outgoings.
The UK’s COVID-19 lockdown measures have left a third (33%) of households struggling on reduced income, according to new research from comparison site GoCompare.1
Lockdown restrictions have left millions of UK households concerned about jobs and meeting everyday financial commitments, including mortgage or rent payments, paying household bills and repaying debts.
While the UK government has put in place measures to help those affected, many people haven’t sought help either because they didn’t know they could ask or because they don’t believe banks, lenders, landlords or utility providers will help them.
The research looked at how the coronavirus lockdown has impacted people’s work and personal finances. The study was commissioned by GoCompare, who are urging anyone in difficulties to seek help as soon as possible.
Work and income
- One in five (21%) of UK adults are now working from home,
- 12% have been furloughed,
- 4% say they have lost their job,
- 8% are concerned they will lose their job,
- A third (33%) of households have seen their income reduce,
- 15% have experienced a severe drop in their finances,
- A fifth (19%) have had to make an emergency budget in a bid to manage their way through the lockdown.
As a result of the drop in their income, 10% of those surveyed said they were concerned about going overdrawn, 8% are having to use a credit card to pay for essentials including groceries, and 6% are borrowing money from friends and family.
Mortgage and rent payments
Meeting mortgage or rent payments were a key concern for one on ten (10%) of those surveyed, but only a quarter (23%) of these people had contacted their lender or landlord to discuss the issue and arrange a payment holiday. Worryingly, two in five (40%) said they hadn’t been in contact with their lender or landlord because they didn’t know they could ask for help or didn’t think help would be forthcoming.
Loans and credit card payments
14% of UK households are worried about repaying existing loans and credit card spending as a result of the Coronavirus pandemic. Of those:
- 26% have been in contact with their lender,
- 21% have received a payment holiday,
- Just under half (49%) hadn’t contacted their lender because they were unaware of the help available or didn’t think they would be able to access it.
Of those concerned about going overdrawn, only a fifth had contacted their bank for help and requested or received an overdraft buffer. Almost half (47%) hadn’t contacted their bank because they didn’t know help was available or didn’t think help would be forthcoming.
Utility and council tax bills
The survey found that only a handful of those who had lost income as a result of the Coronavirus crisis have sought help with essential bills – only 10% have spoken to their utility providers to make more affordable payment arrangements, while 12% had arranged a council tax reduction or more affordable payments.
If you are experiencing financial difficulties, take action as soon as possible:
- Draw up a budget based on your new income and outgoings and stick to it;
- Talk to your mortgage provider or landlord as soon as possible to agree on a payment holiday or new repayment plan;
- Shop-around for a better deal for essential services and insurance such as energy, car and home insurance;
- Talk to your bank about an agreed overdraft and an interest-free overdraft buffer;
- Talk to your credit card, loan or car finance provider to see what help is available in terms of a payment holiday or a new repayment plan;
- The government has made it easier for people to access benefits and claim sick pay. Check what benefits you could be entitled to.
Lee Griffin, CEO and one of the founders of GoCompare, commented, “Millions of people are experiencing a sudden drop in income as a result of the Coronavirus. With no certainty on when the lockdown measures will be lifted, people are understandably worried about how they will make ends meet. But there is help available.
“If you’re struggling with your finances now or think you will soon, don’t ignore the problem in the hope it will go away. Check to see what benefits you are entitled to and find out how to access them and if you’re having difficulty in making payments or repaying loans, contact the relevant organisation as soon as possible to make more affordable arrangements.
“And don’t forget that you can take control of your outgoings too. For example, never let existing contracts for things like car insurance, home insurance, energy or broadband renew without first seeing if you can get a better deal elsewhere. Switching can save you hundreds of pounds a year (e.g. £283 on car insurance, £102 on home insurance and £476 on energy**) and you don’t need to sacrifice quality to get the peace of mind you deserve.”
For more information on Coronavirus and your money visit: https://www.gocompare.com/coronavirus-insurance-money/
For further information please contact:
Anders Nilsson or Louisa Marsden at GoCompare on 01633 654 054 / 01633 655 132
Gordon, Jason or Liz at MAW Communications on 01603 505 845
Keep up-to-date with GoCompare on Twitter; @GoCompare
Notes to editors
1On 9-13 April an online survey of 2,030 randomly selected Great British adults was executed by Maru/Blue. For comparison purposes, a probability sample of this size has an estimated margin of error (which measures sampling variability) of +/- 2.1%. The results have been weighted by age, gender, region and social grade to match the population, according to Census data. This is to ensure the sample is representative of the entire adult population of Great Britain. Discrepancies in or between totals are due to rounding.
The 9 million households figure is based on the ONS Families and Households report which identified 27.8 million households in the UK in 2019. From the GoCompare research, 33% of UK households say their income has fallen as a result of Covid-19. 33% of 27.8m = 9.17m.
** 51% could save up to £283 on car insurance based on independent research by Consumer Intelligence, conducted between 1 March to 31 March 2020. 51% could save up to £102.63 on their buildings and contents insurance based on independent research by Consumer Intelligence, conducted between 1 February and 29 February 2020. Between 1 October and 31 December 2019 at least 10% of customers who provided their usage and received a price for switching both gas & electricity could save £475.92.
GoCompare is a comparison website that enables people to compare the costs and features of a wide variety of insurance policies, financial products and energy tariffs.
GoCompare does not charge people to use its services, and it does not accept advertising or sponsored listings, so all product comparisons are unbiased. GoCompare makes its money through fees paid by the providers of products that appear on its various comparison services when a customer buys through the site.
When it launched in 2006, it was the first comparison site to focus on displaying policy details rather than just listing prices, with the aim of helping people to make better-informed decisions when buying their insurance. GoCompare has remained dedicated to helping people choose the most appropriate products rather than just the cheapest, and has teamed up with Defaqto, the independent financial researcher, to integrate additional policy information into a number of its insurance comparison services. This allows people to compare up to an extra 30 features of cover.
GoCompare is the only comparison website to be invited to join the British Insurance Brokers’ Association (BIBA) and is authorised and regulated by the Financial Conduct Authority (FCA).