One in 10 UK households have started planning their finances to support other generations since the pandemic.
This was one of the findings of the latest Scottish Widows Household Finance Index.
The quarterly health check on people’s financial wellbeing also revealed a rise in employment income for the first time since Q1 2020.
And people’s spending power fell during the three months to September as higher prices partly offset pay gains.
Covid-19 has made more families think about how important it is to consider being financially prepared for the unexpected.”
Jackie Leiper, Scottish Widows.
The index, which measures households’ overall perceptions of financial wellbeing, dipped from 44.7 in the second quarter to 44.0 in Q3.
Despite fading in Q3, the pace of decline remained slower than at any other time since the onset of the Covid-19 pandemic, and a far cry from the spring of 2020, in part due to improved trends around job security and income.
Households also recorded renewed pessimism with regards to their financial outlook over the next 12 months.
‘Considerable’ change in behaviour
The youngest age group surveyed, those aged between 18 and 34, bucked the overall trend, remaining upbeat on average.
Of those households which have increased the scope of their long-term financial plans, more than one in four (27%) were not previously including other generations of their family in planning before the onset of the pandemic.
According to Scottish Widows, this suggests a considerable change in behaviour, with those aged 35-44 recording the largest shift in favour of planning financially for future generations.
Wave of positive developments
Scottish Widows pensions, stockbroking and distribution director Jackie Leiper said: “UK households recorded slightly weaker trends as the post-lockdown recovery began to subside and living costs surged.
“However, our long-term financial planning trackers highlighted a wave of positive developments in Q3.
“Around 10% of households are now considering intergenerational planning, which suggests that Covid-19 has made more families think about how important it is to consider being financially prepared for the unexpected.
“A spark of good news also came with the reopening of the UK economy continuing to drive workplace activity.”