What is next for our family finances?

Published on 4 September 2020

Our special panel of experts look at how coronavirus has affected people’s spending habits and priorities

Claire Deekes, Head of Distribution at The Cumberland
Claire Deekes photo
Philippa Ball, Manager of Penrith Business Improvement District
Philippa Ball photo
Trudy Harrison, Conservative MP for Copeland
Trudy Harrison photo
Paul Foster, devel- opment manager for Federation of Small Businesses Lancashire & Cumbria
Paul Foster photo
How do you think the pandemic will change people’s spending habits?

During lockdown people were spending more on food and groceries – they value that stay- at-home meal more. For the same reasons, we’re spending more on home entertainment and electron- ics, as well as streaming services. People are doing more at home, and the spending reflects that.

Claire Deekes photo
Claire Deekes

We are already seeing that people are shopping less often, but the average spend has increased. They are spending more when they do go to the shops.

Philippa Ball photo
Philippa Ball

Spending habits changed, with the reduced access to shops, less travel and limited leisure, which enabled households to pay off record credit card and loan debt. Job security will ultimately motivate the pro- pensity to speculate and spend. Jobs, jobs, jobs is now the priority for the Government.

Trudy Harrison photo
Trudy Harrison

People have been spending more online during the lockdown as they are reluctant to visit shops unless absolutely essential. This trend will continue until people feel safe. It may take time for consumers to feel confident but, when they do, they will find that adaptations have been made to keep them safe.

Paul Foster photo
Paul Foster
Will this new world of uncertainty make us bigger savers or splurgers?

People will question the value of what they are buying and will feel more inclined to save. Spending is likely to increase locally as the crisis has reminded people about the importance of local businesses, while nervousness about travelling with other people is already push- ing up sales of second-hand cars.

Claire Deekes photo
Claire Deekes

People will save their money and spend it on higher-value special treats. They’ll be more conscious about what they spend their money on.

Philippa Ball photo
Philippa Ball

Internet sales have rocketed but from my own perspective, the lack of people-watching or the cafe culture experience and the home delivery waiting game has its downsides. Those of us fortunate to have a home and garden will continue to invest in improvements and generally appreciate more time spent with family and friends.

Trudy Harrison photo
Trudy Harrison

Staycations will become more popular, particularly in less busy areas, as people spend less on foreign holidays. With concerns over job security though, many people aren’t willing to spend on non-essential items, so the next few months will be crucial as we try to shore up job losses and get people earning again.

Paul Foster photo
Paul Foster
What can be done to encourage people to spend more and help recovering businesses?

There are two main things that businesses can do to encourage people back: to make the customers feel safe and make them feel valued. We have to help people understand the procedures in place, because people want to see clear guidelines and know they will be safe before they enter a shop.

Claire Deekes photo
Claire Deekes

It is important to help people understand the impact their actions can have on a business. For example, we are running a ‘Don’t be a No Show’ campaign to encourage people to cancel a restaurant booking, rather than just not showing up.

Philippa Ball photo
Philippa Ball

The VAT cut will help the tourism and hospitality sectors, along with the ‘Eat Out to Help Out’ scheme. Community leaders must get out there to promote the best we have to offer. Cumbria lends itself to social media, we’re surely the most Insta worthy county of them all. #LoveCumbria

Trudy Harrison photo
Trudy Harrison

The Eat Out to Help Out initiative, while temporary, shows that there is recognition of that reluctance to spend. Confidence for businesses and consumers over the future of the economy and their jobs is the best way to get people to loosen the purse strings. For individuals though, please shop local.

Paul Foster photo
Paul Foster
What tip would you give to somebody looking at their family finances?

Always budget and keep a track of what you are buying. Knowing what you have coming in each month as income and tracking what you are spending enables you to make conscious decisions about your money. If you budget for essentials, you can prioritise whether to spend or save depend- ing on your circumstances.

Claire Deekes photo
Claire Deekes

Don’t assume that the cheapest item is necessarily best for your budget. If you are buying clothing or white goods, for example, shopping local is a great option. Although goods might be slightly more expensive initially, they often last longer and are therefore better for your budget in the long term.

Philippa Ball photo
Philippa Ball

Actually, I find my own four daughters are pretty switched on when it comes to ISAs and getting the best deals. Understanding where all that money goes each month can be hugely empowering – a periodic perusal of the statement reveals how easy it is to get sucked into auto-renewals and not so ‘free’ trials.

Trudy Harrison photo
Trudy Harrison

Don’t panic but don’t overstretch, this will pass and things will improve. The economy will adapt and new jobs will be created.

Paul Foster photo
Paul Foster