Research from pensions and retirement specialist LV= highlights how the finances and emotional wellbeing of UK consumers continues to improve as we approach the end of Covid restrictions. The latest LV= Wealth and Wellbeing Monitor reveals that in June 2021- 18% (9.5m) UK adults said their incomes had increased over the past three months – the highest figures since the quarterly survey started in June 2020.
The figures come as no surprise, due to the pandemic having virtually no effect on the wages and pensions of the entire UK public sector. In many cases public sector pay has gone up slightly, or they have been able to secure overtime – plus save about £3000 per year on commuting costs. By contrast many in travel, hospitality, events or retail have lost everything; their homes, the business, their independence and so on. Maybe that was the plan all along?
As lockdown restrictions ease, UK consumers say their outgoings are increasing, and they are saving less. The proportion of people whose socialising spend increased has risen markedly.
This quarter’s research shows that fewer people (than last quarter) are worried about the future, about losing their job, or about finding work if they lost their job. The mental health of the nation is also beginning to improve with fewer people saying they feel lonely or isolated. However, 12.5m (24%) are now worried about rising prices of everyday items such as food, clothing and utilities.
The LV= Wealth and Wellbeing Monitor – a quarterly survey of 4,000+ UK adults – reveals that in June 2021:
- Fewer people are worried about losing their job. In June 2021, 6% (3.1m) of UK adults worried about losing their job, compared to 8% (4.3m) surveyed in March 2021
- Fears about contracting Covid-19 are subsiding. 17% (8.8m) worried about contracting Covid-19, compared to 23% (12.1m) in March
- Worries about money are beginning to ease. 27% (14.1m) worried about money, compared to 30% (15.8m) surveyed in March
- Mental health issues are beginning to improve. 24% (12.7m) felt lonely and isolated, compared to 31% (16.2m) in March
- More people say they are booking holidays. The number of people who say they have booked a holiday in the last 3 months has risen to 16% (8.2m), compared to 8% (4.5m) in March
Financial priorities after lockdown
People are thinking ahead of their priorities after lockdown restrictions lift. The research reveals:
- 36% (19.1m) adults are planning to go on holiday in the next 12 months
- 28% (14.6m) plan to do more socialising
- 25% (12.9m) are planning special days out with family to make up for lost time
- 23% (11.9m) are planning to make home improvements
- 21% (11m) plan to be more environmentally conscious
- 20% of people aged over 65 plan to give money to children/and grandchildren
(Interesting that buying another car, or changing your existing one, isn’t on that list, despite the boom in online car sales – Ed)
Clive Bolton, Managing Director of Savings and Retirement at LV=, said:
“The Covid-19 pandemic has been incredibly difficult for the nation and had a huge impact on the lives, personal finances and mental health of millions of people.
“However, the success of the vaccine programme, the fall in death rates and the gradual easing of lockdown restrictions is lifting spirits. The economy is proving more resilient than many expected and those who predicted a swift recovery look like they might be proved right.
“Confidence is returning as a growing number of people say their income has increased over the past three months and, as lockdown eases, they are saving less and spending more on socialising. This is good news as it indicates that the UK could experience a stronger recovery when lockdown restrictions are eased and life begins to return to normal.”
The LV= Wealth and Wellbeing Indices:
LV= uses indices to track overall changes to spending, saving and finances. The below indices are calculated by: subtracting the % who stated a negative change over the past three months (e.g. decrease/ worse) from the % who stated a positive change over the past three months (e.g. increase/ better), to work out the overall impact.