U.K. Households Most Gloomy About Finances Since Start of Covid

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U.K. households’ perceptions of their financial wellbeing declined at the fastest rate since the start of the pandemic as savings dwindled and incomes dropped, a survey by Scottish Widows showed.

The pension fund manager said a fifth of those polled said they’re unable to save money at the moment and that they’d raid their pension pots if they could. Another 14% reported their household earnings declined in the last month, leading to the steepest drop in cash availability in almost eight years. 

The findings add to evidence of a cost-of-living squeeze that’s starting to bite into the pace of Britain’s economic recovery. Energy bills and taxes both are due to rise in April, further draining the ability of consumers to spend. Those factors are putting pressure on the government to reverse the planned national insurance rise.

“With inflation soaring into the new year and cash availability at its lowers since 2014, households’ expectations of future financial wellbeing were the most downbeat since the third quarter of 2020,” said Emma Watkins, managing director of retirement and longstanding at Scottish Widows.

Only Britain’s highest earners added to their savings in the quarter, the report released on Wednesday showed. 

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