Third of families ‘may cut back financially for up to a year after lockdown’

More than a third of families with children living at home expect to be making financial sacrifices for up to a year potentially after the coronavirus lockdown ends, a survey has found.

Some 36% think they will have to cut back or make sacrifices for six to 12 months after the restrictions are lifted.

Across the general population, a quarter (25%) anticipate making cutbacks for this period of time, according to comparethemarket.com’s latest financial confidence tracker, which surveyed more than 2,100 adults across the UK from May 1 to 3.

Two-thirds (67%) of households with children at home think the economic impact of the pandemic will have a long-term effect on their household finances, a higher percentage than 51% of the general population who believe this.

Nearly a fifth (18%) of families with children believe the pandemic will have a very long-term negative impact on finances lasting several years, as do 16% of the wider population.

The comparethemarket.com tracker provides weekly analysis of the UK’s financial confidence levels.

It said the proportion of people who struggled to pay household bills in the past week increased week on week from 17% to 18%.

The proportion who were not confident they would be able to keep on top of payments in the coming weeks remained at a fifth (20%).

Among those who were not confident about the future of their finances, a growing proportion said their work circumstances had worsened, perhaps because they had been furloughed, received a pay cut or lost their job.

The proportion of people struggling because their income was not enough to cover their outgoings increased from 38% to 43%.

The proportion of people who said they would not feel confident visiting restaurants, cafes, pubs and cinemas once they reopen also increased week on week, from 39% to 43%.

Anna McEntee, product director at comparethemarket.com, said: “The fact that so many households with children expect to make financial sacrifices for years to come shows the stark impact of Covid-19 on our lives for the long term, especially for those who need to look after dependants.

“With the national conversation increasingly focused on what an exit out of lockdown might look like, there is hope that some businesses may soon reopen.

“However, with more people this week than last week saying they would not be confident going to cafes and restaurants, it may be difficult to persuade the public it is safe to switch back to ‘normal’ life and, consequently, that the economic recovery will be a gradual rebuild rather than a sharp rebound.”