A Government report released in April shows a stark picture of how households are coping with their housing costs and savings in the pandemic. The problems apply to both the home-owning and rental sectors, but renters seem to have been hardest hit.
The Second Wave Household Resilience Study
After more than a year of the pandemic, the Government has published a study of how households are holding up in the wake of the second wave of COVID-19. The Second Wave Household Resilience Study makes disturbing reading.
According to the study, around 10% of mortgage-holders and 20% of renters have experienced difficulties in meeting their housing costs. In addition, an average of 12% of people who responded were behind with at least one household bill. Again, the figures were worse in the rental sector, with 24% of private renters struggling with bills like utilities and credit card payments.
What Effect Has the Pandemic Had on Savings?
The position with personal savings has been more complicated. There’s actually been a rise in the number of households with savings since the start of the pandemic, but considerably more have reported a fall in savings than a rise.
Furloughed workers and the self-employed have been particularly hard hit. 43% of those on furlough have no savings, with 29% relying on savings to pay mortgage or rent. The proportion of self-employed people reporting a fall in both income and savings has been considerably higher than those in full-time employment.
What Do the Figures Mean for You?
These problems may or may not directly affect you, but they could well have an indirect impact if you own a business, with an increasing number of your customers likely to be struggling to pay your invoices. Needless to say, if you’re a landlord any trend towards renters finding difficulties in meeting their payments is bad news.
It’s hard to see an immediate solution. As Sarah Coles, Personal Finance Analyst at Hargreaves Lansdown, said, “There are no simple answers when you’re facing this kind of pressure. A year on from the start of the crisis, there are no easy costs left to cut. There are also signs that people have already made bigger changes to their lives to keep a lid on costs.”
What you can do, of course, is to make sure your policies and systems for credit control are up to date, helping you both chase those who won’t pay and work out a solution with those who can’t pay. You’re very welcome to give me a call if you want to discuss your options.