Self employed, low earners and parents hardest hit by pandemic
The self-employed, those on low wages and those with children are continuing to feel the financial impacts of the pandemic the hardest, new research from the Office for National Statistics (ONS) has revealed.
The latest personal and economic wellbeing report from the ONS found that self-employed workers were three times as likely to have seen their incomes fall, or have to turn to savings in order to cover living costs, as regular employees.
The lowest earners ‒ classed as those earning up to £10,000 per year ‒ were more likely to report negative impacts on their personal wellbeing compared to those earning at higher levels, particularly when it comes to the pandemic making their mental health worse (18%) and feeling stressed or anxious (32%).
Parents have also had a notably tough time. While the ONS found employed parents were less likely to be furloughed since the start of the year, compared to the first phase of lockdown, they were still more likely to report reduced income than those without children.
Grasp the opportunity
Louise Higham, director of financial planning at Tilney, said that the pandemic had shone a light on the connection between our money and our mental health, arguing that the unpredictability of the pandemic had made it harder to maintain a sense of security.
She added: “With social restrictions beginning to lift and signs the economy is starting to recover, now is an opportune time to address any financial setbacks that people have experienced over the past year.
“The pandemic has highlighted the importance of planning financially for the unexpected, be it through emergency cash savings pots, or purchasing protection plans. As we all look forward to resuming those plans that were put on ice over lockdown, feeling financially prepared will be a hugely important step toward greater mental wellbeing.”
Laura Stewart-Smith, head of workplace savings and retirement at Aviva, said that it was notable just what a big impact the pandemic had had on the nation’s highest earners, too.
She said: “Those in the highest income brackets (£40,000 a year or more) were more likely to report that the coronavirus pandemic was negatively impacting their working life, and were six times as likely to report the pandemic was having a strain on their working relationships. This group were also over twice as likely to find working from home difficult compared to those in the lowest income bracket.”
Stewart-Smith pointed to Aviva’s own research last year, which found that more than half of us had reported the boundaries between work and home life had become increasingly blurred because of the pandemic, adding: “The working environment can be a key driver of mental health conditions amongst the working population, so it’s no surprise that the blurring of lines between home and work has contributed towards the increasing numbers reporting mental health issues.”