Covid forces Londoners to take stock of finances

When it comes to their finances, rising bills, a lack of savings and the potential introduction of new taxes are giving Londoners cause for concern for the rest of 2021.

The finding is part of research commissioned by life insurance broker LifeSearch into the health, wealth and happiness of the UK population. Two-thirds (67%) of Londoners told a poll that the Covid-19 pandemic had made them re-evaluate their finances.

A quarter of the capital’s residents (25%) said they had saved money over the past year, while a similar proportion had reviewed their spending more closely. One in 10 Londoners (9%) said they had paid off debts during the past 12 months.

The LifeSearch study, which includes the launch of a quarterly health, wealth and happiness index compiled by the Centre for Economics and Business Research, also found that 71% of Londoners had worked from home at some point during the pandemic. This compared with a figure of 57% for the wider UK workforce.

Impact on work

According to LifeSearch, nearly a quarter of Londoners (23%) believe they work too much and well over a third (40%) said they had worked more hours since the pandemic started. This proportion rose to 48% among younger people occupying the 18-34 age bracket.

LifeSearch said the impact of the pandemic on household finances had been split across the capital. Nearly one in three Londoners (30%) said they now felt better off financially compared with before the pandemic, but about a quarter (27%) said they felt worse off.

Emma Walker at LifeSearch said: “We’ve found a tale of two halves, where some people have been able to use the pandemic as an opportunity to make some positive change in their life, such as saving more money. Others have suffered in ways that have tested the fragility of our existence”.

Across the country as a whole, almost half of UK adults (46%) told LifeSearch they were less happy than they were a year ago. Mirroring this, the 2021 World Happiness Report found the UK fell five places to 18th on the global list.

The top five things that make people happy in 2021 are:

• Time with family & friends – 56%

• Travelling – 31%

• Having time to myself – 29%

• Freedom to go where I want – 28%

• Keeping fit and healthy – 22%

Being apart from family and friends (60%) and feelings of isolation (41%) and anxiety (32%) are key reasons people were less content.

Three out of four adults (75%) state that what makes them truly happy, such as freedoms to go where they please and see friends, has changed in the last 12 months, rising to 82% among young people.

Financial safety net

According to investment adviser Hargreaves Lansdown, a quarter of the UK population have no emergency savings. A poll of 2,000 people in April found that:

• 26% say they do not have an emergency savings safety net

• 14% have no savings and don’t plan to start saving

• 12% of people don’t have savings but plan to start building them

• 53% of people say the past year has made them more aware of the need for emergency savings

• 9% of people say they started emergency savings during the crisis, and 36% added to existing savings.