Prospect of stricter lockdown rules ‘causing significant financial anxiety’

More than a third (35%) of families with children living at home would struggle to pay their bills in the event of another full national lockdown where blanket restrictions forced them to stay at home, a survey has found.

Some 33% said they would have difficulty being able to afford to look after their families in such a situation, according to comparethemarket.com’s household financial confidence tracker survey carried out earlier this month.

More than a fifth (22%) of families with children at home were expecting to take a pay cut or reduce their hours in the near future, the research found.

Over a quarter (27%) of people also believed that another full national lockdown would put their job at risk.

Some 23% of families with children at home said that they would have to take on more debt to afford the cost of another lockdown and 25% would have to take out, or extend, a payment holiday, for example on their mortgage or credit card payments. This compares with 11% and 8% respectively among households without children at home.

On Tuesday, Prime Minister Boris Johnson announced a range of new measures to combat the rapid rise in coronavirus cases in the UK.

Among the measures taking place in England, pubs, bars and restaurants will be ordered to close by 10pm each night.

Mr Johnson stressed that the new measures were not a return to the full lockdown of March.

Comparethemarket.com’s survey also found that many families with children have been trying to build financial buffers.

Nearly a fifth (19%) were putting more money aside in case something happened to their job. And 60% were trying to save more and spend less, while a quarter (25%) were actively looking for additional sources of income, such as another job.

More than a third (35%) of families with children at home think extending the furlough scheme beyond October could give them more confidence in their household finances and three-quarters (75%) want the Government to provide alternative employment protections to help people remain in jobs.

But 29% said that the various support measures introduced in recent months, such as the furlough scheme, temporary mortgage and other debt payment holidays and Eat Out to Help Out, had not helped them financially.

Over a quarter (27%) of families with children at home were not confident they will be able to afford their household finances in the coming weeks, compared to 15% of those without children at home.

John Crossley, head of money at comparethemarket.com, said: “Although the economy has now largely reopened, the prospect of a second wave of infections, and even another national lockdown, is clearly causing significant financial anxiety.

“Parents are caught between the prospect of higher costs on the one hand and diminished income on the other, particularly as the furlough scheme comes to an end.”

He continued: “Banks and financial services providers have responded very positively during the last several months. All the signs point towards them needing to continue to be flexible in the coming months.

“Payment holidays and deferred payments will be an important means of helping UK families stay afloat in what unfortunately looks to be a very challenging period ahead.”

More than 2,000 people were surveyed across the UK between September 11 and 13.