The coronavirus pandemic has impacted people’s finances in many different ways. A lot has changed this year, including what we spend our money on.
For some, the pandemic has created new financial challenges. Illness or a change in circumstances could have had a significant impact on your financial situation. If you’ve been affected by the pandemic then our webpage on Recovering after the lockdown has lots of useful guides and tools to help you.
But for others, lockdown may have provided an opportunity to cut back on spending and make some savings. The current situation has meant we’re no longer able to spend as we normally would on things like eating out, holidays and our daily commute. You might have even made a saving by cutting back on buying a coffee in your break or buying lunch out every day. This ‘new’ normal has changed the way people think about their finances and it’s a good time to improve your money habits and if you can, put a bit more aside for a rainy day.
For some, lockdown offered a chance to consider their finances and focus on paying off some of their debts. From April to June household debt fell by £18.5 billion according to ONS (Office for National Statistics). The Bank of England reported that people in the UK had paid off £15.9 billion from their debts in March, April and May during the first lockdown, £9.2 billion of which was credit card debt and £6.7bn was from loans.
On top of that, some people are saving more. According to the ONS on average we saved almost £3 in every £10 of our disposable income – that’s the money left after paying your bills – between April and June this year, the highest amount since records began in 1987. The ONS also found that household spending fell by a massive £80.5 billion in April to June, a drop of almost a quarter (24.2%) compared to the previous three months at the start of 2020. Most of that came from reduced spending on hotels, restaurants, entertainment, travel and car sales.
We created our MoneySure campaign to help you take more control of your finances, whatever your current situation. If you’ve already cut your spending, or perhaps want to manage your money better, here are our top five tips for making the most of your money:
Whether you want to save a bit more as your circumstances have changed or you want to make the most of the money you’re no longer spending, we’ve put together some useful guides and resources to help you manage your money on our MoneySure page.