Finances have seen a ‘turbulent start to the year’ – important money tips as economy halts
Mortgage lending in the UK was flat for the first three months of 2020 when compared to the same period last year according to the research. The report from UK Finance highlighted that there has been a sharp fall in credit card borrowing, few movements in personal loans and somewhat surprisingly, an increase in buy-to-let activity.
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The full review can be found online but it paints a mostly subdued picture.
Eric Leenders, the Managing Director of Personal Finance for the organisation, commented on the report as it was released: “Following a subdued year in the mortgage market in 2019, any signs we might have seen of improving confidence translating into increased homemover activity at the turn of this year have currently been overtaken by the impact of the Covid-19 pandemic.
“Further evidence of the crisis is evident in unsecured borrowing. The sharp reduction in consumer spending has flowed through to a fall in credit card borrowing. We’ve also seen further increases in deposits held by households.
“This Review does not capture the various support measures to households that the industry has enacted, such as three-month payment holidays and a repossession moratorium.
“By mid-May approximately 1.8 million mortgage payment deferrals had been arranged for customers.
“Similar payment holidays for personal loans and credit cards were introduced at the end of March and will be reviewed in depth in our next household finance review.”
The review caught the attention of other financial organisations who collated the findings with their own data.
One such organisation included money.co.uk, who detailed that British people across the UK have likely saved money during this period.
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Salman Haqqi, a Personal Finance Expert at money.co.uk, had the following thoughts on the findings: “The fairly flat figures from the UK Finance Household Finance Review for the first three months of 2020 reflect the turbulent start to the year.
“This March saw UK pubs, shops and offices close down, the mortgage market grind to a halt, and the furlough scheme introduced by the government.
“As a result, consumer spending has been down, and for those fortunate enough to not see a reduction in their salary, the coronavirus outbreak has provided an opportunity to save. Changes to daily routines, like picking up a coffee or breakfast on the way to work, or meeting friends for dinner and drinks, means that monthly outgoings have fallen.
“In fact, our data revealed that Brits managed to save on average £396 in just six weeks of the lockdown.”
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It should be remembered that while a lot of people have managed to save money during this period, the numbers resented are likely averaged.
There may still be many families in the UK who are struggling to cover their bills or ensuring that income is coming into the household.
Thankfully, money.co.uk provided several tips on how people could save money during this tough time:
Many people may not realise that there are a number of budget tracking tools online which are free to use.
Money.co.uk have their own one which can help keep track of a person’s pay, benefits and regular outgoings in one place.
There is also software and apps available that can help with cash-flow management and Emma, Money Dashboard, Moneyhub and Yolt are all given as an example.
Some people may want to embrace more old-school tips though and for this money.co.uk highlight the humble envelope.
This method involves simply separating money out into envelopes (or pots, jars etc.) for spending on different things.
This will help with avoiding splurging or limiting what is spent on certain treats.
Manage your bills
It’s been highlighted by many that with so many people stuck working at home, we’re all likely using more energy than ever before.
Because of this, it is now more important than ever to look around for the best options available and switch if needed.
On this topic, money.co.uk also highlighted that having a second bank account just for bills is a wise thing to do.
There are also several direct debits that could be cancelled if they haven’t been already.
There is little point in paying for a gym that cannot be visited at the moment.
Finally, the organisation has implored people to utilise the spare time we have, the kind of which were unlikely to get again, to manage their overall debt.
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