More than a third ‘have improved financial knowledge during lockdown’

Six in 10 people say they have become more aware of their finances since the start of the coronavirus pandemic, rising to seven in 10 who have been furloughed.

Some 61% of people have become more aware of their finances, as have 71% on furlough, according to a survey for Experian.

More than a third (35%) of people surveyed think how much they know about financial matters has improved during the lockdown, with three in 10 (30%) actively researching financial advice or guidance to help them manage their money.

Younger adults aged 18-24 were the most likely age group to say they have improved their financial literacy, with half (50%) saying they have done so.

Those who have conducted research were found to be twice as likely as people across the survey to have contacted at least one lender to discuss a payment holiday, Experian said.

The survey also found that 35% of people had managed to save more money in recent months than before the coronavirus pandemic, rising to 40% for people who have improved their financial knowledge.

James Jones, head of consumer affairs at Experian, said: “The coronavirus pandemic has caused financial difficulties for many. People are looking hard at how best to prepare for the potential economic challenges ahead.”

The research also found some gaps in people’s knowledge, with more than a third (35%) wrongly believing that taking a payment holiday as a result of the pandemic would impact upon their credit score.

Nearly half (46%) were not sure or did not think that interest would continue to build up if a payment holiday was taken. In general, people taking a payment holiday will continue to accrue interest unless the lender says otherwise.

Nearly a fifth (18%) of people had already cancelled a direct debit during the pandemic before speaking to a lender according to the survey of more than 2,000 people – which may potentially lead to penalties on their credit score.

Mr Jones added: “It is essential that people discuss their circumstances with their lenders if they are struggling, certainly before cancelling direct debits.

“Unauthorised missed payments can lead to penalties and impact your chances of getting credit in the future.

“Where payment holidays are agreed, interest will still be charged meaning subsequent payments are likely to increase. Therefore, it’s advisable that where people can continue to make payments, they should continue to do so.”

Experian has an online coronavirus hub offering guidance on issues such as payment holidays and managing finances.

Consumer guidance relating to the financial impact of coronavirus is also available on websites such as that of the Financial Conduct Authority (FCA) and the Association of British Insurers (ABI).

Here are the most popular topics people are researching to improve their financial literacy, according to the survey from Experian:

1. Furloughing.

2. How to increase savings.

3. Payment holidays.

4. Credit scores.

5. Financial top tips during the coronavirus pandemic.

6. Switching energy suppliers.