LifeSearch: Pandemic causes 56% of Brits to re-evaluate finances

More than half (56%) of Brits have re-evaluated their finances as a result of the pandemic, rising to 76% among 18 to 34-year-olds, according to research from LifeSearch.

The impact of the pandemic on household finances is divided across the population; almost one in three Brits (29%) feel better off financially now, rising to 34% of 18-34 year olds.

However, 24% feel worse off, rising to 27% of women, 35% of those working part-time, 37% of those on furlough and 35% of those who work in the third sector.

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A quarter (24%) of Brits have saved more money, rising to 31% of 18 to 34-year-olds and 31% of those earning £50,000.

In addition, 12% have changed how and where they save, rising to a fifth (21%) of 18 to 34-year-olds and 16% of those earning £50,000.

An estimated 21% of respondents had reviewed their spending more closely, rising to 24% of women, and 9% have paid off debts.

Only 5% have reviewed their home or motor insurance policies and only 4% have taken out life insurance according to the survey.

LifeSearch did, however, find that enquiries for life insurance increased by 250% in the week of the first lockdown at the end of March 2020 and enquiries for income protection increased by 400% in the same period compared to the previous year.

Looking ahead to the second half of 2021, 72% Brits voiced concerns for their wealth and finances, as 25% are fearful of bills rising, 19% wary of new taxes being introduced, 19% fear lack of savings, 13% are concerned about a low interest rate environment – rising to 22% of 55s and over – and 10% are concerned about having too much debt.

Overall, household savings ratio hit a record high of 25.9% in Q2, equity markets rallied and UK house prices have remained resilient, helping to subdue the overall fall in the Wealth Index.

Emma Walker, chief marketing officer at LifeSearch, said: “In living memory, matters relating to our nation’s health, wealth and happiness haven’t felt so loaded or emotive.

“We created a new index to document this period and lock the UK’s health, wealth and happiness trends into history.

“The result is a major new addition to the socio-economic conversation that will be tracked long into the future.

“While the Wealth Index experienced steep falls in the last year, it hasn’t yet reached a record low, but we may still have that yet to come in the months ahead and this is reflected in the fears that consumers shared with us from job insecurity through to rising bills and savings taking a hit.”