Pandemic has created ‘polarised’ wealth divide – TransUnion

The coronavirus pandemic has created a wealth divide in the UK, according to new findings from TransUnion.

A study by the credit reference agency suggested the pandemic has given 35% of UK adults the chance to increase their savings, while 16% have reset their finances.

However, TransUnion’s study also suggested that 14 million people have accumulated an average debt of almost £400 each, totalling £5.7bn debt since the first lockdown.

TransUnion’s findings, based on a survey among 2,000 UK adults, indicated that 27% of consumers have accumulated some level of debt in the past 12 months, at an average of £399.20.

According to figures from the Office for National Statistics (ONS), the current adult population in the UK is 52,673,433, which TransUnion’s research calculated as 14,221,827 consumers who have collectively accumulated a sum of £5,677,353,338.

At the same time, one in three UK consumers (35%) have increased their savings during lockdown. The credit expert suggested this has likely been down to them being more frugal when it comes to spending (26%) and limiting bigger purchases (16%).

“Our research tracking the ongoing financial impact of the COVID-19 pandemic on UK consumers gives a polarised view,” commented TransUnion managing director of consumer interactive in the UK, Kelli Fielding.

“On the one hand, over half those surveyed are feeling positive about the future (54%), but at the same time, four in 10 say their household income is currently being negatively impacted (38%). Almost one in 10 (9%) have been using credit to supplement their living expenses and that’s a big factor in the amount of debt that’s been accumulated during the pandemic.”

However, TransUnion also suggested there is evidence of better financial understanding – with one in three UK consumers saying the pandemic has made them more aware of their spending (33%).

The research also suggested that 50% are monitoring their credit score at least monthly, which is up from 3% at the start of May 2020.

“It’s great to see that over half of consumers (51%) think their credit score has either stayed the same or improved over the course of the pandemic but it’s a concern that a quarter have never checked it,” Fielding added.

“Being familiar with your credit profile is essential when it comes to managing your financial standing and understanding what your options are in terms of accessing finance and managing your debt.”

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