Warning: Late repayment can cause you serious money problems. For help go to moneyadviceservice.org.uk

Late repayment problems. For help go to: moneyadviceservice.org.uk

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Covid-19, Working from Home and the UK Economy

Covid-19 continues to strike fear amongst residents of the United Kingdom; indeed, it is clear that as we move deeper into 2020 there continues to be evidence of significant negative financial ramifications as a consequence of the coronavirus, the subsequent lock down and the stop/start lifting of restrictions, which may or may not be implemented over the forthcoming months. When thinking about life within the United Kingdom pre-Covid-19, it is hard to remember just how different life was before March 2020. Football matches had significant attendances, large gatherings were allowed, people could see each whenever they wanted to, without the fear of infecting each other and UK residents could enter shops without a face covering. Oh, how times have changed since Covid-19 and within United Kingdom Loans latest post, we have decided to explore what has happened over the previous six months, what may potentially happen over the subsequent six months and ultimately what impact this will have upon personal finances.

Closing pubs to keep schools open

It could be argued that there is a balance between closing pubs to enable schools to reopen. This is an extremely basic formula; that is, pubs close, schools can open. Clearly it is more detailed than this but the significant ramifications of the schools continuing to be closed and children not attending education can and indeed will have far-reaching negative financial ramifications for the United Kingdom economy. Whilst it is important to acknowledge that people should be entitled to go out to have a pint whenever they want to and as long as it is safe, trading this off against the wheels of the United Kingdom economy moving again, due to children being allowed back to school is a minor payoff, one could argue.

In terms of finances, many people have suggested that they have saved significant amounts of money during the lockdown period, due to the fact that they have been restricted in being able to go out and socialise, to attend pubs, restaurants and other social activities. Now that some of the restrictions have been lifted and some establishments are open, there may be some increase in the use of personal funds to cover social gatherings, but the money spent may not be as significant as it once was. The Government has announced that restaurants will be allowed to sell reduced price meals, and this again is to oil the wheels of the economy to try to get the machinations of the financial sector working again. Here at United Kingdom Loans, we believe this is a sticking plaster over a serious wound and will do little to save the restaurant industry which has been massively hit by Covid-19.

Working from home during Covid-19

Some smaller businesses, café’s and shops have been adversely impacted by many of the large corporations’ decisions to allow their workforce to work remotely from home. The Government has stipulated that they would like people to return to the office spaces; in particular this has been in reference to employees who were office based in the civil service and indeed direct orders have been issued from the UK Government stating that their employees should return to work. This is not however as easy as it seems. Some of the larger corporations have found that their staff have been as productive, if not more productive working from home. This would therefore indicate that there is no longer the need for large spaces that come with massive rental costs, running costs and insurances; indeed, the average employee, with the assistance of modern technology, can in fact work from home efficiently and, as a consequence of this, passes on huge savings to their employer. Whilst it could be argued there are advantages to this, it could have significant ramifications for some smaller businesses who service office workers through providing refreshments, lunches and other daily snacks. The benefit and ultimately financial savings to businesses is in fact through their employees working from home, being more efficient in their working practices and saving companies huge sums of money on rental costs for properties and business rates which continue to impact on the British high street.

Rise in infection rates

Many European countries are seeing a rise in the number of Covid-19 infections and are starting to implement more restrictions around freedom of movement for residents of the country. Although this hasn’t (yet) been implemented within the United Kingdom, aside from sporadic rises in towns such as Leicester, there is a very real possibility that coronavirus spikes may be prevalent when the weather cools down and more and more people come out of lockdown.

The government has stated that they will insist schools reopen in September 2020 and some people have commented that there could potentially be rising coronavirus infection rates around this time due to the impossibility of keeping everybody within school free from transmitting the virus. Although it is advantageous to the UK economy for people to return to school in September 2020, given the fact that European countries are seeing a rise in coronavirus infection rates this may not be possible. Australia has implemented lockdown and restrict their residents to stay in between 8pm and 5am, due to a rise in infections; this could therefore potentially hit the United Kingdom as well around the same time as the children returning to school. This is indeed worrying and in terms of the British economy is something that needs to be acknowledged and a contingency plan needs to be implemented in the event children are unable to return to the classrooms.

We are in unchartered waters with the coronavirus and Covid-19 has undoubtedly had a significant impact upon the United Kingdom economy. Many people will potentially find themselves out of employment and we could potentially experience spikes in coronavirus infections moving through 2020. In terms of financial advice, it is certainly important to ensure that any collateral you have is tied up remains placed within safe investments and now is not the time to make risky financial decisions. Here at United Kingdom Loans we believe that there are still choppy waters to navigate and it will sadly be a long time before we are in the clear and sailing to safety.