COVID-19 pandemic show adults are pessimistic about future improvements
Adults expect their financial wellbeing to worsen throughout the course of 2021, lagging behind any optimism of improvements to other wellbeing indicators such as mental, social and physical wellbeing once the vaccination is successfully rolled out.
Research tracking attitudes throughout the coronavirus (COVID-19) pandemic show adults are pessimistic about improvements to their financial wellbeing during 2021. Nearly 3 in 10 (28%) expect their financial wellbeing to worsen. The vast majority of adults (84%) also remain concerned about the future of the economy as a whole[1].
Financial wellbeing is a key aspect of our overall wellbeing and considers the ability to respond to financial unpredictability, meet financial goals and make choices that allow us to enjoy life.
Other wellbeing indicators show 19% expect a worsening in social wellbeing, 18% expect a worsening in mental wellbeing and 17% expect a worsening in their physical wellbeing. However, there is optimism for improvements in these three measures with the continued roll out of the vaccination programme.
The pandemic has led to a worrying divide between the financial ‘have’ and ‘have not’s’ in people’s ability to manage their money and this is set to get worse. Some have been able to save more as expenditure has reduced, but many others have seen a reduction in income over the last year placing extreme strain on their finances.
Concerns remain over the impact of the pandemic on financial wellbeing, particularly over the longer-term. As we hopefully emerge from the worst of the heath crisis there are reasons to be optimistic for improvements in some aspects of wellbeing, but financial wellbeing improvements are expected to lag behind and could have lasting consequences on people’s financial plans and resilience.
The pandemic has driven financial advice for income protection and critical illness up by a third[2]. Other findings suggest the COVID-19 pandemic has driven demand for expert professional financial advice, with a sharp focus on protection and mortgages.
The demand for protection is being brought into focus with people wanting to put financial safety nets in place for themselves and their families amidst health concerns and economic uncertainty.
With many people anxious about their finances asthey face job losses or cuts to household income, concerns about their own health and family members are also driving an increased awareness and need for protection.
Source data:
[1] Aegon – figures correct, January 2021
[2] Online survey (15th October – 22nd December 2020) 94 respondents
