By Rhian Morgan
IT’S fair to say that the pandemic has impacted all our lives in a way that could not have been foreseen at the start of last year. We’re now hopeful that normality is starting to return, but it’s not without some bumps along the way. The effects Covid-19 has had on our personal finances are wide and varied and we will be dealing with the aftershock for some time to come.
As a financial planner I have been working with clients from all walks of life to help them manage their money and best prepare for the future. It’s been worrying to see just how much Covid-19 has created financial vulnerabilities or exacerbated underlying issues.
Pandemic-related problems include the widening gender pension gap; falling ill during the pandemic; the "income shock" of redundancy; increased pressure on relationships and the well-documented growth in issues around addiction that take their toll on finances.
To deal with this situation, I’ve been talking to my colleagues and other professionals, such as lawyers and mental health experts, about the different ways in which we can advise and support people through this challenging time. Being able to meet the needs of vulnerable clients, and their families, is more important now than ever.
Our profession is regulated by the Financial Conduct Authority (FCA) and its research is one indicator of the severe effect of the pandemic. Its Financial Lives Survey in February 2020 –just before lockdown – found that 46 per cent of adults had "characteristics of vulnerability". By October 2020, this had increased to 53%.
Take the growing gender pension gap as an example. During the pandemic the sectors which tend to employ more women, such as childcare and retail, have generally taken longer to get back to work than the likes of the male-dominated construction industry because of restrictions.
An industry survey last month found that the difference between the average pensions of women and men over the age of 55 widened by a staggering £184,000 in the last year. Women would need to work an extra 14.5 years for their retirement savings to catch up with men.
At the other end of the career spectrum, the Resolution Foundation found that more than one in four young people are concerned that poor mental health will have an impact on them finding work after the pandemic.
There is also the increased threat of redundancy on the horizon with furlough schemes due to close at the end of this month.
But people need to know, and be reassured that, there is help out there when it comes to responding to such financial anxieties. We take time to get to know our clients, rather than trying to adopt a "one size fits all" approach, we offer a range of ways to communicate and we work with the likes of the Alzheimer’s Society and other relevant organisations when advising individuals with specific vulnerabilities.
The pandemic will pass in time, but we need to work together to ensure people’s finances can also be stabilised for years to come.
Rhian Morgan is a financial planner with Acumen Financial Planning
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