Coronavirus: Fifth of people ‘do not think their finances will recover this year’ due to pandemic

Research finds 21 per cent of people now rely on credit to get by

High earners are thought to be struggling too (iStock)

One in five people believe they will be unable to recover financially this year from the impact of Covid-19, a survey has found.

Some 20 per cent of people think they will not be able to get their finances back on track in 2020.

Nearly two-fifths (39 per cent) agree they feel “terrified” at the financial impact that another potential major lockdown would have, rising to 46 per cent of people who have been furloughed.

The research also found that 17 per cent of people have used up all of their emergency savings and more than a fifth (21 per cent) are relying on credit to get by.

The survey was carried out between 7 and 10 July for Open Up 2020, an initiative run by Nesta Challenges, which aims to boost awareness of financial products made possible by “open banking” technology.

Open banking allows different providers to securely share information about a customer, helping them to access new apps and other ways to manage their money in a way that suits them.

More than a third (36 per cent) of people said they feel more comfortable using money management apps since the lockdown started in March, the survey of 2,000 people across the UK found.

One in six (16 per cent) people feel they are living “on the breadline”, a sentiment which was also higher among those on furlough, with more than a quarter (26 per cent) feeling this way.

Higher earners were particularly likely to say they were feeling an impact.

More than a third (34 per cent) of those earning more than £50,000 a year said they currently feel as if they are living on the breadline, potentially due to their existing financial commitments and there being limits on the amounts of lost income that furlough payments will cover.

With many people already feeling the pinch, one in five (20 per cent) people are concerned their finances would not be able to endure another major spike in coronavirus cases, rising to 34 per cent of 25-to-34-year-olds and 43 per cent among those earning more than £50,000.

Some 17 per cent of people believe they will have to delay their retirement plans due to the virus, rising to more than half (53 per cent) of those earning more than £50,000.

PA