Published On: Wed, Apr 15th, 2020

Wealth planning expert gives advice as spending data revealed – ‘is this all justified?’ | Personal Finance | Finance

Coronavirus has forced the government to take drastic steps. Not only are people now required to isolate as much as possible, all but the most essential companies are required to stop operations.

Online purchases rose by 5.5 percent with overall travel decreasing by 40.5 percent.

On a particularly sad note, the findings revealed that confidence in the UK economy dropped by 25 percent.

While these figures are revealing, it should be remembered that the consumer spending figures only take into account one week worth of lockdown rules as Svenja Keller, the Head of Wealth Planning at Killik & Co detailed: “This decline in consumer spending only takes into account one week of the official lockdown on 23 March, so we can expect to see a far steeper decline in April.

“Most of us are now not spending on anything other than the mandatory bills such as food, the mortgage, electricity and water, so it’s a good time to understand how much your discretionary spend actually is.”

While news across the board at the moment is rarely good, there could be a glimmer of hope for people who are still in regular work.

As Svenja continued: “For those fortunate enough to still have a job and pay check, you may notice that there is a lot more money left at the end of the month than usual, and it’s eye opening: for a lot of people, discretionary spend is significant and it is an opportunity to consider – is this all justified?”

“Can I reign in my spending and re-allocate when things return to some semblance of normality?

“If you add back in travel costs, you will have a very clear picture of standard outgoings and can begin to work out what you can put aside and, when you are ready, what you can start to invest towards a longer term financial goal.”

These findings are, unfortunately, not unique as a recent report from the Office for Budget Responsibility warned that UK GDP could drop by as much as 35 percent as a result of coronavirus.

When questioned about the dire economic outlook, Rishi Sunak revealed that he is more than aware of the problems but cautioned that the analysis from the OBR was a worst case scenario and not an official forecast.

As he commented at a recent press conference: “This is going to be hard. Our economy is going to take a significant hit and as I’ve said before that’s not an abstract thing. People are going to feel that in their jobs and in their household incomes.”

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