This post hardly needs an introduction.
Everybody's lives have been touched by the pandemic in one way or another, from job security, income and outgoings to mental health, social life, and everything in between.
With the UK starting to open back up, now feels like an apt time to delve into some of the ways that coronavirus has impacted our finances, for better or for worse.
A study by the FCA has shown that impact of covid on adults' financial health has not been purely negative. This shouldn't come as a surprise - households whose income has remained stable have typically seen a drop in spending on things like travel, entertainment and childcare as the world went on pause, leading to increased savings.
A survey by CreditFix even estimated that the average adult was able to save £495 a month as a result of the restrictions, up from £273 pre-pandemic.
That said, the FCA's study also revealed that there were many more people who were impacted 'a lot worse' (15%) than 'a lot better' (4%). Groups that were particularly negatively affected included the self-employed, adults with a household income less than £15,000 per year, those aged 18-54 and BAME adults.
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Those of you who have managed to save during covid have been able to enjoy better financial health, and consequently more financial freedom.
As lockdown eases in the UK, it can be incredibly tempting to fritter money away. After spending so long away from loved ones and not being able to socialise freely, you can't blame anyone for wanting to go out, enjoy meals in a restaurants or go on holiday.
Though it's also worth taking the time to consider other ways you could use your increased savings to your benefit.
1. Pay off debt
The first thing you should do with any extra cash is to pay off any debt you have. Non-priority spendings are a lot more enjoyable in the short-term, but putting off things like debt are very detrimental long-term.
Constantly having bills and expenses hanging over you is not only stressful, it also removes any safety net for when things unexpected expenses arise.
Using the extra cash you've saved over lockdown to get on top of your money can be a great way to boost your financial security and fund the things you'd rather spend your money on in the future.
2. Put a little by
If you are on top of your priority spending and are unsure what to do with your money, consider not spending it at all. This is a wonderful opportunity to build up an emergency spendings safety net. That means that if unforeseen expenses such as a car breakdown or a medical emergency arise, they won't break the bank and leave you vulnerable to building up debt.
3. Why not invest?
If you feel you have expendable income to cover bills and a safety net, and you still have some left over, you should consider investing your money and growing your income.
A great option is putting money into an ISA - an Individual Savings Account.
ISAs allow you to invest up to £20,000 and any returns that you make are completely tax-free. Here are some examples of ISA providers you might like to explore:
With a lot of people having been made redundant or furloughed (about 11.5 million in total), alongside an unstable economy and unforeseen costs, unfortunately some of us have been hit hard by the pandemic.
An estimated 1 in 5 households have experienced financial difficulty due to Covid-19, and while the furlough scheme has hugely helped people to stay afloat, job security has been precarious. The UK unemployment rate stands at 4.8%, meaning that about 1 in 20 people who want a job can't find one.
The pandemic has also affected those with less money disproportionally. While higher income households have enjoyed greater savings, lower income households have increased their spendings - in fact, CreditFix found that 36% of low income households with children increased their spending during the pandemic.
This increased spending has been largely put down to increased food and energy bills (especially when children are at home rather than in school), home schooling costs such as laptops and learning materials, and higher food costs with expensive home deliveries and an inability to travel to cheaper supermarkets if isolating.
The best first step for taking control of your money is to make a budget, something which we explore in this post.
A budget gives you the ability to understand where you money comes from, where it goes and which changes you can make. Perhaps you can cancel a subscription you don't use, or make coffee at home instead of buying it from a cafe.
If you are struggling financially, it's important to remember that you are not alone and there is help out there.
The government has rolled out various benefit schemes for those whose income has been affected by coronavirus. Whether you're earning less than usual, have lost your job or are no longer self-employed, it's worth researching if you are eligible for benefits to lessen financial burdens. Why not check out this article from Citizens Advice which lays out which benefits you may be entitled to?
MoneySuperMarket has also provided a full list of government schemes which were available as of the 08th July 2021, from loan schemes and grants to job retention schemes, which you can find here.
If you have debt that you are finding difficult to pay, there are lots of great free debt advice organisations that can help you. You can find more information at StepChange and Citizens Advice.
