Savings Used to Cope with Financial Impact of COVID-19 as Pandemic Presents New Barrier to Property Ladder for Millennials
One in five millennials (22%) have had their dreams of home ownership dashed, as they re-purpose savings set aside to cope financially day-to-day.
This is according to new weekly research from TransUnion – designed to track the financial impact of the COVID-19 pandemic – which found the ways that 26 to 40 year olds are preparing to manage their income shortfall; including tapping into savings (35%), borrowing money from a friend or family member (22%), and refinancing (19%).
And this age group has felt the blow more than most, with seven in 10 of them (72%) already affected financially by the pandemic. This is higher than their parents’ and grandparents’ age groups (58% and 39% respectively) but slightly less than Generation Z, aged 18 to 25 (78%), although many of those are still supported by their family, live at home and have less to lose financially.
What’s more, eight in 10 (78%) millennials say they are currently concerned about their ability to pay bills and loans. Among these, four in 10 (39%) expect this to impact them in the next two-four weeks – and over a third (35%) estimate the shortfall will be between £500 and £1000.
Breaking this down by outgoing bills, around four in 10 (37%) millennials are worried about paying off their credit card bill and a quarter a personal loan (24%).
To read the full story click: TransUnion UK Press Release
Three out of Five UK Households Negatively Financially Impacted by COVID-19
TransUnion shares new research highlighting the financial impact being felt in the current pandemic and the average expected shortfall when it comes to paying bills and loans
Global information and insights provider TransUnion, one of the UK’s leading credit reference agencies, has found that three out of five (59%) households are already being negatively financially impacted by COVID-19*, according to a new study.
This contrasts with research commissioned just before the outbreak for TransUnion’s Consumer Credit 2020 report, where 60% of consumers** had stated they had the ability to withstand a financial shock – highlighting that the pandemic is affecting even those that may have previously considered themselves to be protected from this kind of uncertainty.
The latest study shows that 70% of those consumers who feel they are impacted are concerned about paying their bills, and say on average they will be short nearly £600 in the near future. Much of this can likely be attributed to the fact that 39% of those impacted have had their working hours reduced, and the research shows that the impact is being felt across all ages, regions, ethnicity and income levels.
In the UK, 59% of survey respondents indicated that their household income has been impacted – the same as in the US. However, of those who said they were not currently feeling the pinch, 28% feel it will be impacted negatively in the future.
- 37% of UK respondents say they will delay purchasing a holiday, and 14% were planning on postponing a home purchase
- Of those worried about their ability to pay bills and loans, 59% believe they will be impacted within a month, whilst 34% state they will see this impact between one and three months’ time
- Looking at UK residents who feel they are impacted financially, and are concerned about their ability to pay bills and loan repayments:
- They note utility bills (46%), rent payments (44%) and credit card bills (35%) are the key bills they will not be able to pay
- This subgroup feel, on average, they will be £598.50 short when trying to pay their bills
- To help pay the bills, 35% will dip into savings, and 26% will seek to borrow from a friend or family member. 23% do not know how they will pay their bills or loan repayments.
Acting responsibly, 36% of the consumers impacted financially and concerned about their ability to pay bills have reached out to companies they have accounts with to discuss payment options, but of those who reached out, 46% say the companies have not provided guidance on what their payment options are.
TransUnion is working with organisations across both the public and private sectors to support them with the challenges they’re facing and will be providing regular insights into the impact COVID-19 is having on consumer finances.
*TransUnion’s consumer research study of 1,095 UK adults conducted on 23 – 24 March 2020. Updates to the pulse research will occur weekly, including insights from various TransUnion leaders about the impact of the COVID-19 pandemic.
Source: TransUnion UK Press Release