Financial misery stalks one in four households as the money problems facing millions during Covid-19 pandemic are revealed in new report
- Report by Financial Conduct Authority revealed extent of UK’s financial position
- Quarter of population would struggle with change such as £50 drop in income
- One in three households in the UK expect their income to fall while a quarter fear they will struggle to make ends meet, according to the devastating FCA report
- Financial Conduct Authority warned it is likely the picture has got even worse
The full extent of the financial misery faced by millions of families amid the pandemic has been laid bare in a devastating report by the City watchdog.
A quarter of households fear they will struggle to make ends meet, while one in three expect their income to fall.
The numbers with ‘low financial resilience’– which means they are battling with debt, have low levels of savings or erratic earnings – have risen from 10.7million to 14.2million.
A new report has revealed a quarter of households fear they will struggle to make ends meet
This means a quarter of the UK population would struggle to cope with even a small financial shock such seeing a £50 drop in their monthly income.
There are also now 27.7million adults who are considered vulnerable because of poor health, low financial resilience or events such as redundancy.
Experts described the figures as ‘harrowing’ and ‘startling’. And the Financial Conduct Authority warned it is likely that the picture has got even worse since it conducted the survey of more than 22,000 individuals in October.
To cope with the hardship, a third said they expected to cut back on essentials, one in ten intended to use a food bank and one in six planned to take on more debt, according to the report.
One in six, or 3.2million homeowners, said they had taken a mortgage holiday.
The FCA also said the pain is not being shared equally, with younger adults and those from Black, Asian and Minority Ethnic backgrounds worst-hit.
Financial Conduct Authority warned it is likely the picture, which experts called ‘harrowing’, has got even worse since it conducted the survey of more than 22,000 individuals in October
However, nearly half of those questioned said they had not been financially affected by Covid, with one in seven actually better off, according to the report.
They have been able to pile up extra savings after not being able to go on holiday or socialise during lockdown.
Nisha Arora of the FCA, said: ‘While there are some positives in the data, many of the findings are worrying.’
Tom Selby, senior analyst at AJ Bell, said the report laid bare ‘the profound and harrowing impact coronavirus has had’.
Kevin Pratt, personal finance expert at Forbes Adviser UK, said: ‘These are stark and startling figures, and they serve as an important reminder of how Covid-19 is ravaging the finances of millions of people.’
Sarah Coles, of Hargreaves Lansdown, said: ‘One of the cruellest aspects of the pandemic is the way it has devastated some people’s income while leaving others better off.