As the United Kingdom enters the 7th week of the lockdown, which was announced nationally on March 23rd 2020, it appears that some of the stringent conditions imposed by the Prime Minister are about to be lifted. United Kingdom loans has analysed the past seven weeks in terms of the financial impact on households, and there has been some interesting findings around what impact the coronavirus has had upon personal income and how savings have been made in many households as a consequence of the health pandemic.
In the last seven weeks residents of the United Kingdom have not been able to leave the property on more than one occasion. At United Kingdom Loans we have had some interesting discussions around what this means, specifically, how long we are able to remain out for and who we can actually see when we ae out. We have also not been able to visit our nearest and dearest, although some of these rules have recently been relaxed, there continues to remain some confusion around who you can see when you leave your home. Shopping for essential items on one visit per household has also been part of the arrangements for UK residents since March 23, and it appears that, based on the statistics provided by the government, there has been a potential positive impact on the nations health as a consequence of the restrictions, although we are clearly not out of the woods yet!
Personal Finances and Covid-19
But how has Covid-19 impacted on personal finances and has there actually been any benefits when considering income, as a consequence of the coronavirus? There have been many people who have argued they had to remain within the home for extended periods of time and this has actually lowered the amount of money people have spent, in comparison to how much they would have spent prior to the national lockdown. A closer look at this would indeed prove this point; examples of where money has been saved would be fuel costs. Many people have been encouraged to work from home and this flexibility has afforded a more productive nation of workers within the United Kingdom, who have not needed to rely upon their vehicles as much as they previously did. Because of this, the cost of forking out for large quantities of fuel to travel across the country has lowered and this has led to significant savings. When considering transport, another significant financial savings has been the reduced use of public transport. As many people can now work from home, there has been less need for people to use trains and buses, all of which can accrue a significant sum of money. It can therefore be argued that there have been significant sums of money saved due to people taking advantage of working from home arrangements.
Savings Through the Lockdown
Lots of people within the United Kingdom are also turning to home-cooked food as opposed to buying precooked purchased processed food. In terms of finances, this has culminated in significant savings and indeed a healthier option for many people! Similarly, some people are now more focused when they do shop and there has been an increase usage of shopping scanning apps, which has also culminated in savings for the British household. We have had discussions at United Kingdom Loans HQ around our own shopping habits and the consensus was that we have all saved money through focusing our shopping habits.
Whereas previously, whilst working away from your own property, there would be additional spending for items such as lunch, snacks, coffee’s, and other non-essential items we tend to turn to when well working away from the family home. Because of the lockdown, many of us have in fact saved money by not needing to fork out small, but significant sums of money, on non-essential items, which we would have got into the bad habit of buying, prior to the health crisis.
Future Impact and Progression
So where does this leave the United Kingdom in terms of finances moving forward? Well, the restrictions were recently lifted in May 2020 and, although there has been significant confusion around what can and cannot be done, in terms of personal income, there can still be savings to take advantage of moving forward. The Prime Minister has articulated that only essential workers who need to work away from home should travel to work and therefore it could be argued there are savings to be had in transport costs to and from the workplace, as the majority of people will continue to remain working from home.
There are also hundreds of thousands of people drawing upon the Governments implemented furlough scheme and this has offered some relief to UK residents through protecting a portion of their monthly salary. There have however been recent developments pertaining to the scheme and payments may decrease to 60% of an average salary soon, albeit with an extended period. Clarity will be needed on this as clearly this will have an impact on a large proportion of the nation.
This is certainly an interesting time to be around, and the general consensus is that the timescales for the full restrictions being lifted are currently unknown. Although this is worrying, clearly it is important for everybody to remain safe and although there can be savings made in terms of personal finances, the health and well-being of individuals remains imperative and is essential that everybody adhere to any government guidance and advice pertaining to any restrictions. When the lockdown is lifted there may be opportunities to rebalance personal income and it could be argued that potentially, there will be opportunities in terms of employment, as the United Kingdom economy will need to be kickstarted again, following its recent downfall as a consequence of the national pandemic.