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This week we’ve been focusing on how people are feeling about their personal financial situation, both now and in the future. 
While we’ve seen a broadly consistent picture from the topics of previous weeks (health, fitness, food, drink), it’s clear that finance pulls people apart. While some are really feeling the pinch, others are finding they have more left over at the end of the week. Facing an uncertain future, new financial attitudes, behaviours and needs are emerging. 

#1 Financial difficulties are far from universal, with over half of people saying their income is unaffected 

Financial impacts of the lockdown have so far been quite polarising, with extremes of haves and have-nots pulled further apart. 

56% of the nation agreed that the COVID crisis had not really affected their month-by-month personal income, indicating that in the short-term many people are able to keep spending.

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There was some limited variance in agreement by age, with those over 55 being most likely to say that this was the case – and those under 34 being the least likely to agree. 

From our qualitative community we can see the more financially confident tend to be current salaried workers in safe(r), often digital or essential sectors. However there’s a flipside; people most adversely affected are the self-employed, currently unemployed, gig-economy workers, or those just starting out in the job market, and across a wide number of sectors pay cuts and furlough are making people feel uneasy about current finances and job security.

“No financial worries at all. If anything we are doing better in lockdown than we were before. We were able to save more money than usual last month and hope to be able to do the same this next month.”

“I’m furloughed from work so have obvious concerns about finances as I’m 20% down on my wages as well as potential implications for the future… I’m concerned my employers may be forced to reduce the workforce with a downturn in the economy.”

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#2 Younger working professionals are worried about their long-term financial health

Generally, just over a third of people claim to be weighed down by financial worries at the moment. However, there is a significant difference in opinion depending on your age and lifestage. Younger, working-age professionals, as well as those in family households (49%) and in London (49%), are more likely to have doubts and concerns right now.

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In tandem with this, we see the same cohorts are far more concerned about their medium-term job security.

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This lack of confidence around whether they will be employed by the end of 2020 naturally flavours how they think about their buying power in future.

We’ve seen first-hand from our community that there is a clear divide where older workers nearing retirement are feeling relatively comfortable, while younger workers with an unstable job market and shaky housing ladder to navigate in the coming years and decades feel uncertain and apprehensive about the future.

Some parents and grandparents are worried and preparing for a future where they’ll need to support the next generation through difficult times.

“My life won’t change that much, due to my age, situation, and upcoming retirement - because my money’s all sorted out. But this will be a crisis for younger people, people still making their way.”

“My field of study is Communication Design, and I am afraid that, as it is not a “necessary” profession (like a doctor) it will be even more complex for me to find a job, especially my first job.”

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#3 Young families are particularly worried about Christmas and future big ticket items

The pattern is sustained when people are asked about their likely spending on holidays and Christmas later in 2020 – younger workers and families (43%) are most likely to feel they will need to cut back.

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Their worries extend beyond luxuries and nice-to-haves, and into their ability to borrow and make the life purchases that they expect to at their age.

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Backing this up, we’ve seen from our qualitative findings that where future income is unknown, people are often taking the easier decision to put planned purchases on pause and wait until uncertainty fades. As well as job insecurity, young people are worried about the future of the housing market and getting on the property ladder - or their equity in the housing market if they’ve already bought. They’re also keeping an anxious eye on the lowered interest rate and wondering about their ability to save and invest.

“We were looking at moving house this year however that is looking more and more unlikely not because of our personal financial situation but because of the property market. We were wanting to purchase a new build property and were interested in a part exchange deal. If property prices reduce dramatically this may not be possible for us as we may not have enough equity.”

“People will just be happy to cherish times with their loved ones [at Christmas] rather than the worry of spending lots of money.”

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#4 Amongst the whole population, only a minority feel their banks are letting them down

The general mood amongst people is not that their banks are failing to give them enough support, or being too slack with providing information to their customers. Less than a third of people would agree with either of these ideas.

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From the community, we’ve seen that high street banks are generally commanding a high degree of trust from customers. It’s worth noting that those we spoke to are generally unconcerned about the safety of their money in banks too. We’ve seen evidence of appreciation of bank support offered, with some furloughed workers taking advantage of a mortgage holiday.

“I am 100% happy regarding the security of banks and do not worry about this at all.”

“Whatever situation I find myself in, every other customer will be the same, I feel this is pretty much out of my control therefore try not to worry about it.”

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#5 There is a greater need for help amongst young, working families - as well as a bigger opportunity to meet their needs through new product innovation

Perhaps unsurprisingly given their more abundant concerns, younger family households are more likely to believe that their banks aren’t doing enough. We believe this is best read as an indicator of their heightened needs around finance.

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Whilst they are asking for more from their banks, they also display a raised appetite for new products and services that could help them make their money go further - and this is where there could be an opportunity to innovate in the sector.

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#6 We’ve heard people are spending less - as there’s less opportunity and need to part with cash

As lifestyles adapt to lockdown, we’ve heard from our community that their spend has altered accordingly. Whether people are feeling the pinch or not, there is less money spent in general, with cancelled holidays, reduced travel, and no eating out putting money back into consumers’ pockets.

A notable exception is grocery spend, as people tell us they are often spending more on groceries. This is partly because all food is eaten at home, and as grown-up kids return home some households have more mouths to feed. But it’s also because spending on groceries is an opportunity to be creative and have a good time as a family. Increased grocery spend seems to be happening across all budgets, as it’s a relatively affordable luxury, and often replacing more expensive behaviours (e.g. takeaways). 

For those with a stable income, this reduction means they have money burning a hole in their pocket, and there’s some willingness to “splurge” on more expensive items because of money saved in other parts of life. For some, online shopping has become a way to alleviate the boredom, with so few other ways to spend excess cash.

“I am spending less money on clothes and beauty products. I normally buy a few new items of clothes a month which I haven’t done as I like being able to go into shops to try stuff on. Also I don’t see any point in buying new as I haven’t got anywhere to go to wear them.”

“Since lockdown the food bill has doubled! We eat breakfast, lunch, dinner, and snacks in between and I find myself buying more treats are we are having to stay indoors. So having nice food makes you feel good but it’s costly.”

“I’m slightly more inclined to care less about the price of things I’ve ordered from e.g. Amazon, because I am saving so much in my daily life.”

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#7 It’s a time to take stock, literally

Our online community showed us that an abundance of time coupled with the abrupt change in spending and change in interest rates has led people to take a look at their financial health and options, and those with stable incomes that can afford it are putting money aside for a rainy day.

Those with existing portfolios are checking that their investments still make sense in light of the shifting market, and younger people, as well as setting aside their new found riches into savings accounts, are starting to research and explore investment products.

In part this is motivated by concern about job markets in the future, and even those with little money to spare are thinking more seriously about their options and feeling like they should save all they can - as who knows what will happen next.

“I am using mobile banking a lot more to check finances and transfer money to savings accounts. I have set up an investment account in lockdown, so I feel like leaving lockdown I have a new outlook on finances.”

“I am now sorting out finances as I never had time to look at them before.”

“I am thinking about my savings a lot more and where I can have been doing research into better interest accounts.”

Keep an eye out for our report next week where we’ll be exploring the topic of entertainment and whether we see shifts in consumer leisure behaviour and needs whilst in lockdown.

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Lockdown Unlocked is anonline qual community with 50 members across the UK, combined with a nat-rep quant tracker of 1,000 UK adults.