Protect your personal finances amid Covid disruption

interactive investor comments on the latest IHS Markit UK Household Finance Index.

Commenting on the latest IHS Markit UK Household Finance Index, Myron Jobson, Personal Finance Campaigner, interactive investor, says: “Hope of life returning to business as usual by Christmas has been scuppered by an uptick in the Covid-19 ‘R rate’ and the subsequent ‘mini-lockdown’ measures to curb this. And the prevailing sentiment is that we won’t be returning to the status quo anytime soon, so it is important to ensure that your personal finances are protected against the continued coronavirus economic disruption. 

“Many will want to ensure that their finances are well fortified against a forecasted tide of employment once the furlough scheme in its current form comes to an end on 31 October. This means squirrelling away more money if you can – three months’ salary is a fair rule of thumb for an emergency cash safety net. However, given what we been through, many people will want to double that, even amid paltry savings rates.

“It is interesting to see that demand for unsecured debt such as credit cards and overdrafts has risen this month to the greatest extent since April. It is just as well that the city watchdog has recently announced support measures for users of consumer credit and overdraft products who continue to face payment difficulties due to coronavirus and beyond. Consumers should remember that payment holidays will not constitute free money – you’d need to pay it back.”