LONDON, June 9, 2020
LONDON, June 9, 2020 /PRNewswire/ -- The Covid-19 crisis has reduced financial wellbeing in the UK and consumers expect a further decline in the next six months, according to a European survey published today. Despite this, some UK consumers have experienced a positive effect on their spending.
The whitepaper, published by credit management group Intrum, outlines the financial impact of Covid-19 on private households across 24 European countries. More than half the UK respondents (55 percent) reported a decline in financial wellbeing over the last six months, higher than the European average of 48 per cent. More than a third (38 per cent) expect a further decrease.
The paper's findings build on Intrum's European Payment Report, published in November 2019, which showed that the younger generations and households with children are under particular strain.
The Covid-19 pandemic has exacerbated this trend, with 74% of UK households with children reporting an income drop as a result of the crisis, compared with 50% of households without children. Furthermore, 55 per cent of households with children say that after paying their bills they rarely have enough money to last until the end of the month.
Across Europe, millennials are more likely to say their financial wellbeing has suffered, than other age groups. However, in the UK, 18-21 year olds appear particularly hard hit – with 69 per cent saying the crisis has negatively affected their finances, and 38 per cent saying they have gone into more debt to cover their everyday spending as a result.
Saving for the future is a concern for women – nearly half (43 percent) say they are not at all confident in their ability to save for retirement, compared with 33 per cent of men.
While the crisis is adding pressure to most consumers' financial situations, 43 per cent of UK respondents report a positive impact on spending. With economies largely shut down, 'non-essential' spending, in areas such as tourism, clothing and dining is down.
Eddie Nott, Intrum's UK Managing Director, said there is evidence that consumers who are spending less during the crisis are taking the opportunity to settle their debts. "After many of our customers paused their payment plans in March and April, we have seen a significant increase in people contacting us to settle their accounts in May," he said.
"However, many of our customers still need breathing space and are currently unable to pay their installments. For example, those employed in heavily-hit sectors such as retail and leisure, and vulnerable households with the smallest financial margins, such as families and young people."
Nott adds: "The financial sector, and collections industry in particular, has long offered forbearance and worked with people struggling financially. The crisis means we are now doing so on a much larger scale."
* About Intrum European Consumer Payment Report 2019: Intrum has gathered data from 24,004 consumers in 24 European countries to gain insights into European consumers' everyday lives, including their spending and ability to manage their household finances on a monthly basis. Intrum is speaking to 250 000 indebted consumers around Europe every day.
** About pulse survey: Intrum has gathered data from 4,800 consumers in 24 European countries. The survey was conducted in May 2020 and the sample quotas were set on age and gender to ensure the fallout of respondents was nationally representative based on census data from each market.
In the UK Intrum has achieved top Investor in Customers (IIC) ratings for six consecutive years and has won a string of awards for its ethical approach. Intrum UK is a registered firm of the Lending Standards Board and the first business of its kind to achieve an ISO standard for dealing with vulnerability.
Intrum is the industry-leading provider of Credit Management Services with a presence in 24 markets in Europe. Intrum helps companies prosper by offering solutions designed to improve cash flows and long-term profitability and by caring for their customers. To ensure that individuals and companies get the support they need to become free from debt is one important part of the company's mission. Intrum has circa 10,000 dedicated professionals who serve around 80,000 companies across Europe. In 2019, revenues amounted to SEK 16.0 billion. Intrum is headquartered in Stockholm, Sweden and the Intrum share is listed on the Nasdaq Stockholm exchange. For further information, please visit www.intrum.com.