At MyBump2Baby, we are proud to work with financial experts throughout the UK. Today we share a blog from one of our experts on what he thinks will happen and things families should consider after Covid 19.
I was recently asked to write an article on pensions savings, specifically the importance of long- term savings in building a comfortable income in retirement, but also to highlight the ‘pensions gap’ that mostly affects the females amongst us.
Being smart, I thought I’d delay writing the article until after the UK Budget to see what announcements our Chancellor made that might affect the accuracy of my writings.
Events have overtaken me.
Just 25 days later, the Budget of 2020 has been superseded by events and is already long forgotten.
The world has changed. It’s now unrecognisable to the world we knew just 25 days ago when the Chancellor was standing at the Dispatch Box in Parliament making his well-received Budget.
Get it Done! A very quick history.
In the Budget, Rishi Sunak announced additional funds to support the NHS and a stimulus to the economy of approximately £30bn using the tag line ‘Get it done’ to the applause and backslapping of his colleagues.
Ten days later – JUST TEN DAYS – the world had changed so much that he was back at the lectern with a new and additional package of measures totalling £330bln to support an economy that was falling off a cliff edge.
Think about that number. £330 billion. Equivalent to nearly £1 in every £6 spent in the UK economy every year was being provided to companies and individuals to support them whilst the UK closed for business.
Whilst we must applaud his decisive action, no plan was immediately going to resolve all issues or satisfy all sectors of the population or business. Adjustments will inevitably be made, and more money will be needed to support the economy.
One announcement from the budget did survive, ‘Whatever it takes’ in support for the NHS in tackling this virus.
Pre and post
In much the same way that we count the years BC and AD, I suspect we will think about the effect of corona virus as pre-covid and post-covid.
For me, I think there will be a lot of economically small, yet cumulatively massive positive changes to the way individuals and companies conduct themselves; how they act, serve and perhaps use resources in the future.
In no particular order, and by no means exhaustive, some thoughts on post covid Britain:-
- Woe betide the politician or commentator who criticises, questions or restricts the resources available to the NHS. It’s long been a political competition to grandstand support for the NHS and its staff at the election box, but the outpouring of support for the doctors, nurses, ambulance and support staff seen across all media ensures the NHS will remain first and foremost a National Treasure.
- Shop assistants, delivery drivers and keyworkers in many guises should all expect a new level of appreciation after they battled to keep large sections of the population fed and supplied during Covid.
- The police, carers, social support services – all will have a legitimate call on public support and resources. (Traffic wardens not so much!).
- Recognition of the education system and its role in supporting front line workers and their families will come in time.
- Family, friends and personal relationships previously taken for granted will be celebrated, appreciated and sought like never before.
- Manufacturers will need to change the way they work by building a network of local suppliers that can provide parts and components for the finished product without flying them around the world.
- New and old skills will have to be learnt in order to ensure the UK is capable of locally manufacturing what consumer want.
- Our economy will increasingly produce a great range of materials and components in a reversal of globalisation.
- Farmers and food manufacturers will be seen to be as important to the supply chain. More produce will be produced locally for consumption. Do we really need kiwi fruit, avocado or even strawberries in the shops 12 months a year?
- Membership of the Royal Society for the Protection of Birds, Astronomy and local nature groups will spike as hundreds of thousands of home-schooled children look up from their screens to see the world around them
- Climate change scientists will have data coming out of their ears as the effects of parking 95% of the world’s airliners and a 50% reduction in car and motor journeys become measurable. Industrial pollution will be measurably lower, skies cleaner and air pollution lower as the effects of shutdown make themselves evident to all but the most diehard deniers.
- Social awareness and social worth will be a greater corporate consideration almost immediately. (Unfortunately, I fear it will take a while for large parts of the population to understand socially acceptable behavioural changes).
- The way we work may have changed for-ever! Do we all need expensive office space, a centralised workplace? To travel at peak times just so we can have a bit of facetime interaction around the water-cooler.
- With more people working from home, property design will reflect the need for private workspace and better light.
- Cash is (
King)dead ! In current circumstances cash is considered ‘dirty’ in a way it never has been before. Post-Covid we will pay by card for our lunch, coffee or glass of wine in the same way we currently use a £20 note – without thinking.
- Technology is essential. In order to be economically interactive, you will have to use new and better technologies as the world goes increasingly online
- Privacy is a thing of the past. Everything you do, every move, journey, transaction or interaction will be logged, pored over, averaged, compared and assimilated by Big Tech and governments in order to understand, sell and rule your lives. (To be fair, this was already occurring, it’s the speed and depth of acceptance that is changing.)
- Starting in 8-12 months’ time huge demands will be put on the NHS – specifically midwifery
services – as a baby boom takes place which will have planning consequences for education and social services for years to come as the class of 2021 grows older.
- With domestic violence on the rise during lockdown, mental health practitioners will earn a living off lockdown for years to come.
- Divorce rates and separations will spike in the coming months as relationships break under the strain of enforced close proximity.
And if that all wasn’t enough to consider, Brexit needs to be agreed.
In my mind, it’s never been a more exciting time to be in politics.
Since the end of the Second World War, there has never been a greater opportunity to reshape the whole of the domestic economy and the way the UK interacts with the rest of the world.
Yet, what is also evident is that we need to be more personally responsible for our own wellbeing.
It’s important to understand that the government will only provide us with a basic level of social support.
If you are currently furloughed by your employer, can you survive on 80% of your income? If you have been off work through sickness, can you survive on £95.85 a week statutory sick pay?
Could your family survive, stay in the same house, have the same standard of living if you weren’t working, or worse, if you died?
Are you relying on the government to provide 100% of your retirement income?
Post-Covid: will stuff matter?
Is it important to have the latest and (supposedly) best new phone/computer/trainers/TV/car, when all you’ve craved this last few weeks is the ability to interact with your friends and family – well, is it?
Whilst some will never be able to save for themselves, I’m shocked to keep reading about well paid professionals and the self-employed not having any savings put aside to support their families in a crisis. It won’t surprise me if, in general, we start to plan more sensibly for the unexpected, buying protection and saving regularly for the long term into retirement
Ask yourself the question, when you look at what you’ve spent over the last three weeks against what you normally spend, are you surprised at how much extra money you have in your pockets?
Does your normal “essential” spending suddenly look like it’s discretionary?
Do you really need a coffee and cake each morning? Does lunch have to cost £5 or could I make myself a packed lunch? Have you saved a fortune by not going to the pub? Jumping in a taxi whenever you pop out? Do I need to spend £60, £70 or £100 a month on digital TV?
Perhaps then ask yourself if you would be better using this new-found surplus money on building an emergency ‘pot’ that you could use to cover short-term essential expenses. Next, you might consider saving for your retirement or protecting your loved ones against unexpected illness or death.
Seek advice, understand and discuss your current situation and future needs and aspirations, make a plan for the future. By contacting and talking to a financial adviser, you are not committing to any expense, you are having a conversation about your future and investigating your options.
By taking these first steps towards protecting your family and building long term retirement savings you will be making a huge personal positive out of the current negativity surrounding us all.