The Covid legacy
As we race towards the five year anniversary of the first COVID lockdown on the 23rd of March 2020, there’s no doubt that we are now seeing the full scale of the lasting legacy. The pandemic has had a drastic impact on the workplace, as well as the habits and views of workers across the UK.
The world since then has been rife with uncertainty, with the impactful mini-budget in 2022, global conflicts and economic turmoil contributing to the effects already lingering from the pandemic. All of this has had a significant effect on the way workplaces function, and how workers view both their role and their finances. Uncertainty, coupled with a challenging economic climate has ultimately led to a decline in financial resilience for many, which could lead to long-term implications for long-term financial goals.
The workplace
Flexible and hybrid working has been the most notable change to workplaces, and employees’ attitudes towards it since 2020. Most workers, who are able to work flexibly or in a hybrid environment, now view it as a standard arrangement - especially when looking for new roles. According to the Office for National Statistics, more than 8-in-10 employees1 who had to work at home during the pandemic planned to work in a hybrid way after the lockdowns, and more than three quarters (77%) of workers2 say that they would consider a new role if their employer scrapped flexible working arrangements.
Employee expectations
As such, flexible or hybrid arrangements have now become a standard requirement for swathes of jobseekers, and demand for fully remote roles is also on the up3. But it’s not just the way employers work which is becoming increasingly more important. The pandemic shifted employees’ perceptions in what their employers should take responsibility for and, unsurprisingly, healthcare ranks highly.
Workers now expect more healthcare support from their employers in the wake of the pandemic. As well as people becoming more conscious of health, the pandemic also demonstrated the difficulties to financial resilience caused by long-term sickness, and having to care for others. Long COVID, for example, heavily impacts personal finances, and research from the National Institute for Health and Care Research indicates that those with long COVID earned 25% less because of it, or £10,929 on average4. A third (32%) also required some form of care from an informal carer.
The impact on savings and retirement
COVID, and the well documented cost-of-living crisis which has followed, have skewed retirement expectations, and altered the way people approach their finances and think about their money.
For many, cash reserves increased throughout the pandemic largely down to the reduction in spending options, as people switched their focus to addressing debts. This has also altered the way people view their retirement plans. According to ONS data5, half of adults (50%) reported that it is very or fairly unlikely that they will rely on some paid work in retirement. Of those aged 60 to 65 years, 61% are unlikely to rely on some paid work in retirement compared with 27% of those aged 50 to 54 years.
Confidence that retirement provisions will meet their needs also increases with age. Just over one-third (38%) of those aged 50 to 54 years said they were confident that their retirement provisions will meet their needs, compared with more than half (55%) of those aged 60 to 65 years being confident that their retirement provisions will meet theirs. Given the lower confidence between the two age groups, it’s likely that a rising number of workers will take increased debt into their retirement.
Conclusion
The increased number of gig economy workers and those with self employed second jobs, as well as self employed workers in general, also brings with it the increased risks associated with not having protection plans in place - akin to the benefits they miss out on from not being an employee. However, many do not have the time to investigate or organise protection. Seeking an adviser to explain the products available to workers would help to ensure they feel more secure and protected.
From an adviser’s perspective, working from home and hybrid working models have changed the way advisers interact with clients and potential clients. The common use of technology has made things easier and has made advisers more accessible - but as of yet a proportion of advisers are yet to make that shift, meaning they are losing out on opportunities to provide support and products to a far wider customer base.
Sources:
1ONS - is hybrid working here to stay?
https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/articles/ishybridworkingheretostay/2022-05-23
2Greenhouse Candidate Experience report https://www.greenhouse.com/uk/blog/2023-candidate-experience-report-us
3Flexa report 2024 https://flexa.careers/blog/evolution-of-work-report-2024-2025
4National Institute for Health and Care research, 2024 https://evidence.nihr.ac.uk/alert/how-much-does-long-covid-cost-individuals-informal-carers-and-society/
5ONS reasons for workers over 50 leaving employment
https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/articles/reasonsforworkersagedover50yearsleavingemploymentsincethestartofthecoronaviruspandemic/wave2#retirement-expectations-and-the-cost-of-living