Since the outbreak of coronavirus, it’s been estimated that around a quarter of the UK’s population have been furloughed, with more than a third of workers affected in some areas. This has meant that a large percentage of the nation’s earnings have decreased by at least 20%. Obviously this has impacted just about all of the population emotionally, and has meant that many people have had to cut back on their spending.
In terms of well-being, recent surveys from the Office of National Statistics (ONS) have shown that the most common issues arising from the furlough scheme are concerns about the future, particularly in regards to both personal and the national economy, as well as feelings of boredom, stress and anxiety. 62% of those surveyed admitted to worrying about the long term ramifications of lockdown, while 57% have stated that boredom has impacted their well-being.
Social distancing has also caused a lot of people to ruminate on things they are no longer permitted to do. According to Statista, the thing people miss the most during lockdown is seeing their friends and family, which hardly comes as a surprise. On the survey carried out in May 2020, 66% of people put this as their first choice. The second highest vote was dining out at restaurants and bars – 38% of those who undertook the survey claimed this was what they missed most. Just below eating out was going on holiday, with 35% of people opting for this as their top answer on the survey.
In regards to the impact of furlough leave on the economy, as of March 2020, The Money Charity have stated that within the UK, 12.8 million households have either no money in savings, or less than £1,500 in total. And when you consider the average household debt, which is around £60,363, the fact that such a large percentage of people have been furloughed becomes more concerning than ever. These statistics certainly contribute towards the general feelings of stress and anxiety about the future that almost two thirds of the population have reported.
But have people actually cut back on their spending, with a reduced income in mind?
According to a YouGov survey published in early June 2020, just over half the nation are spending less each month than they typically would. 54% of Britons stated that the outbreak of Covid 19 has caused a minor, moderate or major decrease in their spending. Those most likely to majorly cut back on their spending are people aged between 18 and 24, who are statistically more likely to be lower earners.
Largest decrease in spending is transport
In terms of category, the largest decreases in spending will hardly come as a surprise, with the category showing the largest cutback being transport. 71% of people have advised that their transport costs have decreased, ranging from slightly to significantly. In terms of travelling and holidays, 61% of those surveyed stated that they had cut back on these costs, while other services like dry cleaning and haircuts have seen a drop of 56%.
Spending on clothing has reduced
Other areas that have dipped since lockdown include spending on apparel, particularly activewear, as well as takeaways. In regards to the latter, 40% of people have said that they are spending less on takeaways than they were before the coronavirus outbreak, though 16% have said that such outgoings have increased.
When it comes to clothing, 42% of the public have reported that they are spending less on apparel – most clothing is classed as a luxury item anyway, and when we’re not leaving our homes for great lengths of time, dressing in the height of fashion probably doesn’t seem as important. In terms of activewear, the reasons for this decrease are equally transparent, though there is a large age divide with this category.
Overall, spending on activewear has gone down by 17%, but only 10% of those aged 18 to 24 stated that they had reduced such spending during lockdown, while 21% of those aged 65 and over said that they were spending less than they normally would on activewear and exercise equipment.
Spending has risen on food shopping
Despite all these reductions in spending, there are some areas that have seen increases since the outbreak of the pandemic. The survey undertaken by YouGov showed that people are spending more on groceries, particularly towards the beginning of the lockdown. 52% of the population have increased their outgoings in this area, which includes 11% of people who stated that they are spending significantly more.
People have spent more on entertainment products and services
With the COVID-19 lockdown restrictions, people have spent more money on things to entertain themselves and children at home.
The second largest increase in household spending is alcohol – 34% of people are spending more on booze to consume at home.
In third and fourth place are hobby supplies, with a 24% increase, and books, with 21% of people purchasing more than they normally would. 20% of Brits have also said that their spending has increased on digital services, such as streaming services and online classes.
How Spending Differs For Men and Women
In terms of spending patterns for men and women, for the most part the statistics are similar, but there are a few areas in which women say they’re spending more. With groceries, 58% of women are spending more, while 45% of men have increased these costs, and categories like hobby supplies and books also have a gender divide. 29% of women are spending more on the former since lockdown, and 26% on books, whereas 19% of men have increased spending on hobby supplies, and 17% on books.
The Impact of Furlough Regionally
On a national level, it can be seen that people have cut back on spending in most areas. But what has the decrease in income meant on a more local level? And do the predominant industries in each area have an effect on the number of furloughed workers, and how much their outgoings are?
Before exploring each area, it’s important to note that the three industries that have seen the most furloughed workers in the UK are Retail, Accommodation and Food Services, and Manufacturing. Thus if the majority of the population in a region are working in one or a few of these sectors, there will be proportionally more furloughed employees, and we’d expect to see a decrease in spending as a result of this.
|Sector||Companies Furloughing||Employees Furloughed||Value of Claims (£million)|
|Accomodation and Food Services||102,000||1,403,300||2,595|
In the North East of England, the main industries are health and social work, retail, manufacturing, and education. As of March 2020, it’s been estimated that these areas employ around 575,000 people. In terms of the top three industries furloughing employees, these rank second, third and fifth when it comes to the number of individuals working in these sectors, employing around 343,000 people.
Total number of employees furloughed – 282,500
Based on government employment figures, it would appear that approximately 23% of the working population of the North East have been furloughed. This is the second highest percentage in the UK, yet the impact on spending does not reflect this. The national average for people who have said they have had a major increase in spending since lockdown is 3%, but the figure is more than double in the North East. 7% of people in this region have stated that they’ve majorly increased their spending, and 38% say that furlough has had no impact on their expenditure.
37% of people have seen a minor or moderate decrease in spending, and only 4% have claimed to have a major decrease. Again, this is well outside the national average – 10% of people in the UK have made major cutbacks.
When asked how financially secure the population of the North East felt, 47% said that furlough had no impact on their feelings of security, while 29% of people felt a minor or moderate decrease in terms of financial security.
The biggest three industries in the North West of England are retail, health and social work, and manufacturing, which employ around 1,443,000 people. Retail alone, which is the foremost sector in the region, employs approximately 602,000 people, while 342,000 people work in manufacturing.
Total number of employees furloughed – 828,900
Despite this high number of furloughed individuals, proportionately the statistics are similar to other areas of the UK. Government data shows that around 22% of the North West’s working population have been furloughed.
In regards to spending, 25% of people in this region claim that lockdown has had no impact, while 43% of people have seen a minor or moderate decrease in spending. For those making major cutbacks, the North West is statistically lower than the national average of 10% – only 6% of people here have noticed a major decrease in spending.
When it comes to feeling financially secure, 27% of people felt that there had been no impact since the pandemic, while 30% have felt a minor or moderate decrease.
Yorkshire and The Humber
In descending order, the biggest industries in Yorkshire and The Humber are retail, health and social work, and manufacturing. These areas employ around 1,026,000 people. In terms of the sectors that have seen the heaviest levels of furlough, approximately 873,000 people work in retail, manufacturing, and accommodation and food services within the locality.
Total number of employees furloughed – 603,600
Just over 21% of those working in Yorkshire and The Humber have been furloughed, which is similar to other nearby regions. Spending figures are also fairly average in this area when compared with the rest of the UK – 19% of people have seen no impact, while 44% have seen a minor or moderate decrease. Few people have felt less financially secure though – 47% of Yorkshire and The Humber’s population feel just as secure as previously, and 28% feel minorly or moderately less secure.
Within the East Midlands, the largest sectors are the same as Yorkshire and The Humber – retail, health and social work, and manufacturing. These industries employ approximately 999,000 people, and 838,000 people are employed in the top three furloughed sectors.
Total number of employees furloughed – 559,100
Government employment data indicates that slightly over 22% of the workforce of the East Midlands have been furloughed. The same percentage of people have said that lockdown has made no difference to their spending, and 42% have made minor or moderate cutbacks.
In terms of feeling financially secure, 38% of people believe that the pandemic has caused a minor or moderate decrease, while 37% of people have felt no impact.
As with other regions in the north and the midlands, the top industries for the West Midlands are retail, health and social work, and manufacturing, employing around 1,129,000 people. Around 916,000 people are employed in the top three furloughed industries, which is approximately 31% of the workforce.
Total number of employees furloughed – 697,100
Around 24% of the West Midlands population have been furloughed. This may not sound statistically significant when compared to other areas, but this increase of a few percent does encompass thousands of people, and this is the highest rate in the UK. This is not reflected in spending habits though, which are similar to just about every other region. Furlough has made no impact to 24% of the West Midlands population when it comes to spending, and 39% have seen a minor or moderate decrease.
35% of people in this area feel just as financially secure as they did before the outbreak of coronavirus, and 38% of people feel lockdown has caused a minor or moderate decrease to their perception of financial security.
East of England
The biggest industries in the East of England are retail, health and social work, and scientific and technical work. These fields employ around 1,200,000 people, while the largest furloughed sectors employ 914,000 people, making up almost 28% of the East’s workforce.
Total number of employees furloughed – 709,600
Government figures show that just over 21% of working people have been furloughed in the East of England. In terms of spending, those claiming lockdown has made no impact (24%) and those who have only noticed a minor or moderate decrease (44%) are in line with the national average, but when it comes to a major increase in spending, the East of England’s rate is double that of the UK average. Overall, 3% of people have claimed a major increase in expenditure, while 6% of those living in the East have said the same.
Since the outbreak of Covid 19, 45% of people in this region have stated that they feel the same level of financial security as before, and 30% have felt a minor or moderate decrease in security levels.
Despite having similar levels of furlough as the rest of the UK in total, there are a few areas in the East of England where the furloughed workforce is much higher than the surrounding constituencies.
Banbury, Crawley and Slough have almost twice the amount of employees claiming furloughed wages than most places in this region. This seems to be due to the predominant industries in each constituency, as well as the proximity to the UK’s biggest airports. A large percentage of Heathrow and Gatwick’s workforce live in the surrounding towns, and have, for obvious reasons, been unable to work during lockdown.
Much of the surrounding area of Banbury is predominantly rural, and this area acts as a commercial and retail centre for large parts of northern Oxfordshire. The main industry of the constituency is manufacturing, including car components, plastics and electrical goods.
Economically, Crawley is the main centre of industry between London and the south coast. Its industries are mainly made up of manufacturing and service companies, many of which are connected with Gatwick Airport. The airport is one of Britain’s busiest international airports, and has supported Crawley’s commercial and industrial growth since it was built in the 1940s.
Outside of London, Slough has the highest concentration of headquarters for global companies in the UK. Slough Trading Estate alone supports thousands of jobs in hundreds of businesses, and has become an attractive spot for major corporations, largely due to its proximity to Heathrow Airport and good motorway connections.
London’s biggest four industries employ around 2,753,000 people – these sectors are scientific and technical work, retail, administrative services and health and social work. Around 1,263,000 people are working in accommodation and food services, retail and manufacturing in London, which are the industries that have seen the largest furlough numbers in the UK.
Total number of employees furloughed – 1,074,900
London appears to have the lowest furlough rate of the UK – just over 17% of the workforce have been furloughed, according to the government’s employment figures. Yet when it comes to feeling financially secure, London is above national average. 16% of Londoners have noticed a major decline in feelings of security, whereas overall, the statistic is 11%. Around 36% of people in the area felt no impact, and 31% felt a minor or moderate decrease.
In terms of general spending, 20% of Londoners believe that furlough has made no difference, while 44% have made minor or moderate cutbacks.
In the South East of England, the largest industry is retail, which alone supports 745,000 employees. The next largest sectors are health and social work, education, and scientific and technical work – these four industries employ around 2,250,000 people. About 28% of the South East’s workforce work in the top three furloughed sectors.
Total number of employees furloughed – 1,035,400
Around 21% of those working in the South East have been furloughed – despite the fact that the actual number of employees comes second only to London, proportionately the figures are similar to the rest of the UK. People’s overall spending and how financially secure they feel are around average in the South East also – 17% felt lockdown had no impact on their spending, and 35% felt it made no difference in terms of security, while 49% made minor or moderate cutbacks in spending, and 34% felt minorly or moderately less secure.
Of the top furloughed industries, in the South West, these rank first, third and fifth in terms of the largest industries of the area, employing 950,000 people. Around 1,103,000 people are employed in the most common sectors of the South West, which are retail, health and social work, and accommodation and food services.
Total number of employees furloughed – 654,800
Government data shows that just over 21% of the workforce have been furloughed in the South West of England. In terms of spending, 48% of people in this area have made minor or moderate cutbacks, while 23% have not changed their spending habits.
Interestingly, those in the South West seem to feel more secure financially than the national average. 42% of people felt the same level of financial security as before, while 32% felt minorly or moderately less so, and 4% had a major increase in feelings of financial security. This last figure may not sound like a large percentage of people, but it’s double the UK average.
In descending order, the largest industries of Wales are health and social work, retail, manufacturing, education and accommodation and food services. These five sectors make up over 54% of the jobs in Wales, employing around 811,000 people. Of these people, 459,000 work in the top furloughed industries.
Total number of employees furloughed – 316,500
Approximately 21% of the working population of Wales have been furloughed, which is similar to other local regions. Yet only 6% of people have made major cutbacks in spending, which is just over half the national average of 10%. 23% of people’s spending remains the same, while 45% have made minor or moderate cutbacks.
The residents of Wales feel about as financially secure as the rest of the UK – 36% feel minorly or moderately less secure, while 41% felt the pandemic had made no difference to their feelings of financial security.
The biggest industries of Scotland are health and social work, retail, and scientific and technical work, which employ around 984,000 people. Approximately 764,000 work in the three sectors that have seen the highest furlough rates.
Total number of employees furloughed – 628,200
Slightly over 22% of Scotland’s workforce have been furloughed, according to government employment figures. 42% of Scots felt lockdown had made no impact in terms of their financial security, while 20% saw no impact in regards to spending. 31% felt minorly or moderately less financially secure, while 45% made minor or moderate cutbacks in their spending habits.
Northern Ireland’s top three industries make up around 41% of the jobs in the region, employing 384,000 people. These sectors are retail, health and social work, and manufacturing – two of the three largest furloughed industries are included here, with accommodation and food services ranking sixth.
Total number of employees furloughed – 211,700
Almost 23% of those working in Northern Ireland have been furloughed, placing it the third highest region after the West Midlands and the North East of England. In terms of the economy, it’s been approximated that consumption spending has gone down by 40% since lockdown.
Throughout the UK, the biggest four industries are retail, health and social work, scientific and technical work, and administrative services, employing just under 15.8 million people and making up around 44% of the national workforce. The top three furloughed sectors account for just over 28% of the jobs in the UK.
Total number of employees furloughed – 8,696,000 (includes unknown regions)
The furlough rate throughout the UK seems to be around 24%. This percentage does include a large number of furloughed employees whose location is unknown, so could not be attributed to the region when calculating the percentage there.
In terms of overall spending, 23% of people have said they have increased their spending during the COVID pandemic. A further 22% have seen no impact, while 44% have claimed a decrease in spending.
When it comes to feelings of financial security, the national average for a minor or moderate decrease is 33%, while 41% of people felt that the pandemic has made no difference to their financial security outlook.
According to ONS data, as UK households have been prevented in their spending by government guidelines, they are saving on average £182 per week, which is around 22% of the average household weekly budget. This money would typically be spent on things such as travel, holidays and eating out.
A lot of the money saved has clearly gone towards repaying consumer debt. The Bank of England have stated that £7.4bn has been paid towards such costs in April alone, which is the largest net repayment since records began in 1993. Approximately £5bn of this was credit card debt, which is significantly more than the monthly average of £300m.
How Will People Spend Money After Lockdown?
According to surveys undertaken by YouGov, people’s spending will largely reflect the results of the Statista survey on what people miss most. For instance, the main thing people intend to spend more money on once lockdown is completely over is eating out.
A lot of people will be spending on food
32% of people felt they would spend either a lot more or a bit more on meals out, while 49% felt their spending would be the same as it was prior to lockdown. This doesn’t mean that people intend to spend less on getting creative in their own kitchens though – 22% believe they’ll spend more on home-cooked meals than they did before lockdown.
This figure may suggest that the pandemic has caused more Brits to experiment and cook more, from artisan breads to all sorts of sweet treats, and they intend to keep it up.
When it comes to takeaways, the survey indicates that lockdown has not made a significant difference in terms of craving food deliveries. 64% of people feel that their spending habits won’t change the other side of lockdown, while almost a fifth say that they’ll buy fewer takeaways than previously.
Spending more on personal care
It will hardly come as a surprise that almost a quarter of the people surveyed intend to spend more on personal care than they did before lockdown, particularly in regards to going to the hairdresser. It seems that the old cliche of wanting what you can’t have is true in this instance, though 10% of people believe that they’ll spend less on personal care than they did before – perhaps they’ve used some of their free time to learn hairdressing skills themselves.
More domestic holidays
The second highest predicted increase though, after eating out, is domestic holidays. Almost a third of people (29%) hope to spend more on domestic holidays than they did prior to lockdown, and only 10% feel they will spend less than before. Brits may not feel as comfortable travelling abroad though, as similar percentages of people believe that they’ll spend more and less on international holidays than before lockdown, with figures of 20% and 19% respectively.
Spending less on TV subscriptions
Another result that’s hardly shocking is that people intend to cut back on their TV subscriptions after lockdown is over. Many of us have spent hours binge watching series on platforms like Netflix and Amazon Prime Video whilst stuck at home, and hope to spend more time outdoors when the opportunity presents itself. 17% of Brits say they’ll reduce their subscription costs after lockdown, so that they’re spending less than they did before it started.
More cinema visits
There are similar figures for increased spending when it comes to going to the cinema and events such as football matches, theatre shows and gigs. 17% of people intend to visit the cinema more than they did before lockdown, while 19% hope to attend more events than previously.
In all cases, however, the majority of people feel that lockdown will make no difference on their spending, and they will go back to the same levels as before lockdown started. This would indicate that they have been responsible with their finances throughout the pandemic, and won’t need to cut back on more luxury items or experiences once it’s all over.
Despite a lot of dire warnings about the national economy, this survey seems to imply that everyday life for most Brits will get back to a semblance of normal once the restrictions have been lifted.