Pressure mounts for renters, self-employed, lone parents and furloughed workers

Sarah Coles, personal finance analyst at Hargreaves Lansdown, comments on the publication of the government’s resilience survey (carried out in November and December), as pressure mounts for renters, self-employed, lone parents and furloughed workers.

Key points:

One in ten mortgagors (712,000) and one in five private renters said it has been difficult to pay for housing in the past year.
12% of people were behind with at least one household bill. Among private renters this rose to 24%. Private renters were most likely to be behind with utilities (14%), credit card payments (9%) and other household bills (9%).
A quarter (25%) of households said that their savings had fallen during the crisis.

Sarah Coles comments:

“The pandemic has dragged hundreds of thousands of people the wrong wide of the resilience gap, and renters, self-employed people, lone parents and furloughed workers have been hit particularly hard.

“Overall, more households have savings than before the pandemic, and 13% of people have been in a position to actually put more aside, but those in full time employment and people who own a house with a mortgage are much more likely to fall into this bracket.

“Meanwhile, a quarter have seen their savings fall, and vulnerable groups are more likely to have suffered. People on lower furlough incomes and the self-employed who lost work have been less able to save. Meanwhile, those who rent are more likely to have eaten into their savings to pay rent.

“They’ve struggled with their bills too. Renters have found it far harder to pay their bills: one in ten are behind on rent, and almost one in four are behind on at least one bill. Lone parents are most likely to have fallen behind with bill payments.

“There are no simple answers when you’re facing this kind of pressure. A year on from the start of the crisis, there are no easy costs left to cut. There are also signs that people have already made bigger changes to their lives to keep a lid on costs. Around a fifth of privately rented households have increased by at least one person, which is a sign people are moving in with others to cut costs.

“If you haven’t spoken to anyone about the challenges you face, it’s worth doing so sooner rather than later, because there is help out there. Debt charities like Stepchange can help with everything from applying for benefits to speaking to people you owe money to. They may be able to relieve some of the pressure, and if all else fails they can offer support as you get through another incredibly difficult year.”

More statistics from the survey

Savings:

More households reported having savings compared to before the pandemic: 67% had savings, up from 55% in 2019/20.
43% of those who are furloughed have no savings.
A quarter (25%) of households said that their savings had decreased during the crisis and 13% said they had increased.
A fifth (18%) of those with a mortgage said savings had risen.
Self-employed people were more likely to have suffered a drop in income (40%, compared to 18% of full-time employees) and a drop in savings (35% compared to 20% of full-time employees).
32% of retired people said their savings had fallen since the start of the pandemic.
30% of private renters and 22% of owner occupiers had used savings to pay bills. Around a third (32%) of renters had used savings for rent, compared to a fifth (20%) of mortgagors.
Almost a third (29%) of those on furlough had used savings to pay their mortgage or rent, compared to 17% not on furlough.

Bills:

Almost one in ten (9%) private renters are behind on rent, and another one in ten (8%) said they were likely to fall behind in the next three months.
Couples without children and households of unrelated adults were most likely to be up to date with bills, while lone parents with children aged 15 or under were least likely to be: 37% of this group were behind with at least one bill.
Half (50%) of private renters in arrears were also behind with household bills.

Kindly shared by Hargreaves Lansdown

Main photo courtesy of Pixabay