30% of UK adults are more financially vulnerable as a result of the COVID-19 pandemic, according to new research by insurance firm Royal London.
What did the research find?
Royal London’s research, conducted by Opinium between 13 - 17 August 2021, amongst 2,000 nationally representative UK adults over the age of 18.
15.9m - 30% - of UK adults said they have become more financially vulnerable since March 2020. The main causes for this were split across a number of factors, with over one third (33%) attributing their vulnerability to a reduced income, while one in five (19%) say they already had a lack of savings to fall back on when the pandemic struck. Other reasons why Brits felt worse off financially included taking on more debt (13%) during the pandemic, and not being able to afford rising living costs (11%).
However, only one in six (16%) said they feel financially "resilient", with men (20%) almost twice as likely to feel secure in their finances than women (12%). This follows from similar research earlier this month which revealed that UK women saved a combined £50bn less than men during the pandemic, while the gender pension gap grew by £27,000.
How to be more financially secure
Fortunately, if you find yourself feeling vulnerable when it comes to your finances, there are a number of ways you can make yourself more secure and prepared for the future. We've rounded up our top 3 tips to become more financially secure.
Step 1) Clear any outstanding debt
The first step to becoming more financially secure is to pay back as much existing debt that you can, so that if you do end up feeling a financial squeeze, you won’t have to worry about debt collectors or deadlines on top of everything else. Head over to our article “The simple tricks to repay debt quicker” and our guide on where to get free debt advice to begin clearing your debt.
Step 2) Build an emergency fund
Having an emergency fund that you can turn to when money gets tight is absolutely crucial if you want to prevent yourself from slipping into debt. The ideal amount would be three months’ of your net income, so that you can keep up with mortgage or rent repayments and any other typical bills should you lose your job or find yourself in a temporary rough patch, but any cash set aside for a rainy day is better than nothing. You can find out more about how to start your emergency fund here.
Step 3) Budget
Budgeting can mean the difference between ending the month with nothing left to show for the past 4 weeks, or having enough money left over to set aside for savings, some personal shopping, or even a nice day out. Check out our article “How to budget for beginners” to get started, and make sure to use the myriad apps to help you make budgeting part of your day-to-day life so you can learn to budget without even trying.