The pandemic has exposed low levels of ﬁnancial resilience by many. New research has found that 19% of adults in the UK say they are not ﬁnancially resilient. That’s equivalent to around 10 million people.
As a result, those with low ﬁnancial resilience would feel unable to make their ﬁnances without relying on a credit card or personal loan.
The research from MetLife UK found that although 60% of respondents said they feel ﬁnancially resilient, almost a third admitted they would still require ﬁnancial help from a family member, their partner or someone else.
The economic impact of the pandemic has been damaging to the ﬁnancial resilience of many with 29% of respondents claiming their ﬁnancial situation has worsened since last March.
8% of respondents said their ﬁnancial situation had declined signiﬁcantly, while 19% said it has only deteriorated slightly.
Regardless of feelings of ﬁnancial resilience, 25% said they have no disposable income on which to fall back on, should they need it. Examples of needing some disposable income include paying unexpected bills or a higher mortgage or rent payment.
As a result of living at the limit, a third of respondents said they worry about their short-term ﬁnancial situation and almost a third worry about the longer-term.
Rich Horner, Head of Individual Protection at MetLife, said:
“Many ﬁnancial fears have come true for so many over the last 12 months. Having to use up savings to make ends meet, borrow money, pay cuts, taking time off work unpaid due to accident or illness or to care for a loved one – the list is endless.
“The ‘it’ll never happen to me’ premise has never felt so prominent. So, although worrying, the reality is that many people have no savings to fall back on. And unfortunately, it can easily spiral. The combination of worrying about having no disposable income and not having any savings can have a signiﬁcant impact on mental health and an uneasy feeling of being extremely ﬁnancially vulnerable.
“We need to support and encourage people to review what solutions are out there in the immediate future but also the longer-term, such as ﬁnancial protection – a safety net that in cases such as illness, time off work or an accident– can make a real difference. Ultimately, it’s important that people plan today to help their future selves to feel and become ﬁnancially resilient.”
If you are looking to become financially resilient, we can help you visualise what your financial future could look like. Contact Wells Gibson so that we can formulate an appropriate solution that meets your requirements.