According to a recent survey, three quarters of individuals say that the impact of the Covid-19 pandemic has made them realise the importance of having a savings pot to fall back on in the event of unexpected circumstances.
The research, conducted by Smarterly the fintech business focused on workplace savings and investments, found that this concern was somewhat higher amongst females with 80% of those surveyed expressing concern compared with 76% of males. There was, however, very little discrepancy across age groups from 18-55+ years.
The true financial impact of the Covid-19 pandemic and subsequent long-term effects are yet to be seen but it is clear that many individuals and businesses have already been significantly impacted, and will continue to feel the effects for some time to come.
Recent figures released from the Treasury show that 8.9 million workers have been furloughed at 80% of their usual pay and The Great Big Business survey found that around a third of businesses have implemented pay cuts for staff. Furthermore, research from the Joseph Rowntree Foundation and Save the Children, found that seven in 10 families have experienced increased financial pressures during the pandemic and had to cut back on essentials, and over half are now behind on rent or other bills.
Steve Watson, Head of Proposition, Smarterly, said: “The impact of coronavirus on jobs and businesses has been significant and it’s shown us that having some level of financial resilience is absolutely critical. Putting money aside each month, even if it’s just £10, can make a big difference as savers start to see this build up over time. Hopefully we won’t see another pandemic on this scale again, but the reality is that unexpected circumstances, be that the fridge breaking or the loss of a job, can have a huge financial impact if we don’t have a buffer of funds to help cushion the blow.”
With financial wellbeing becoming an even higher priority on the corporate agenda, the same research study found that 91% of employers agreed that having easily accessible savings is hugely important for their employees with nearly 84% agreeing that the employer should help. It found that nearly half (47%) of employers would consider implementing a workplace savings scheme, where employees can contribute to directly from their pay.
Watson added: “Employers are stepping up and realising that they need to help their employees build up a level of financial resilience and our research found that nearly 53% of employers want to introduce initiatives to help employees save and invest so they are better prepared to deal with unexpected situations, such as coronavirus. Financial worries can have a negative impact on an employee’s performance at work so it makes sense for businesses to support their employees and help manage their money better.”
Smarterly‘s Financial Resilience research conducted amongst 2,000 individuals and 1,000 HR Managers – May 2020