How are so many people still spending as normal?

[nc1962]

I'm so confused by what I'm hearing compared to how people seem to be living their lives.

On the one hand, it's everywhere about job losses, redundancies, people not being able to pay mortgages. But on the other - a lot of people I know/vague acquaintances are going on holiday at every opportunity, buying a lot of stuff and spending a lot of money on house renovations.

Our household has been hit badly by all of this, with a massive drop in income.

Of course it's different for everyone and up to people how they spend, but I'm so uncertain what to think. Are there really so many households (normal as opposed to very rich) who have been able to carry on as normal? I thought we were very typical in terms of having taken a big hit, but now I don't know what to think and whether this is a short term or long term thing.

I wanted to ask what others are finding to be the case - are a lot of people you know carrying on as normal, or has there been a big financial impact?

We saved quite a bit in fuel costs, I didn't really buy any new clothes, because, well, where would I wear them, no lunches at work/uni (I do both online now). However, that didn't help, they all went into home redecorating/renovating

I am still confused though- there are a lot of responses here and hardly anyone has talked about a big income drop or job loss.

MN is a middle class bubble and it’s not the middle classes or the rich who will be affected by this - it’s the lower middle and working classes who are suffering.

Thanks Ddot

Don't feel bad Baxter, it's important to hear people's experiences.

I think unless you are in the public sector, the mc bloodbath is already happening or will come. Certainly, the sector I’m in, projects are cancelled and redundancies are looming.

There was a Tweet last week (by the Resolution Foundation or NEF perhaps?) saying that there were a lot of middle class middle age jobs that would go, e.g. layers of management, though so far it's disproportionately younger, lower income, and / or BAME workers who've been affected, and of course the self-employed.

I was going to say the same. A combination of Brexit plus a double if not triple dip recession is going to plunge all but the very wealthy into a lower standard of living.

I'm completely unaffected financially so spending as normal. Was never one to go out much anyway so lockdown doesn't really make much difference.
I am however trying to help out my kids in their 20s as they have both lost jobs due to virus so I'm probably spending more than normal in that respect.

@peasoup8

I am still confused though- there are a lot of responses here and hardly anyone has talked about a big income drop or job loss.

MN is a middle class bubble and it’s not the middle classes or the rich who will be affected by this - it’s the lower middle and working classes who are suffering.

@peasoup8 my DH is very senior in MC employment sector but it’s niche (without being outing, think along travel industry) & we are already affected. Many in his same profession who would also be considered MC, & in a field that caters from WC to UC across the board have been made redundant already, household name companies. The most recent reports I read suggested swathes employed as lawyers, accountants & such like will also be made redundant in coming months. I think many people WFH whose companies have been helped by the furlough scheme could be in for an unpleasant shock in coming months. 🤷🏻‍♀️

There's a risk of sounding eager for others to have job losses to stage the suffering. Not every company used the furlough scheme, some just continued working and paying taxes, but from home. That's useful actually, the country needs some tax revenues. Some companies were planning reductions already and covid was a convenient excuse. There are risks with these constant shocks to the economy, but it's really in nobody's interest for more people to be made redundant than have been already and those who can keep up their spending should do so, because that keeps more people in work until this passes.

Even those whose incomes are currently secure are a bit crazy to be splashing the cash.

If I had spare money, I would be squirrelling it away to pay for private healthcare in case someone in my family falls ill or needs an operation.

My partner's still working, but now from home. Not commuting has saved us £200 a month. So we're actually better off now than we were. I'm a SAHP, though I'm in the early stages of starting a business, so we've seen no drop in income thankfully!

@Figmentofmyimagination

Even those whose incomes are currently secure are a bit crazy to be splashing the cash.

If I had spare money, I would be squirrelling it away to pay for private healthcare in case someone in my family falls ill or needs an operation.

I'd be surprised if some of the people on this thread don't have it already. MN is that demographic.

@Figmentofmyimagination - the private hospitals were doing NHS work and were given covid patients to care for in wave 1, with everything else cancelled (except maternity). You won't be getting preferential treatment in a pandemic (and nor should you).

I'd imagine private insurance at the moment would primarily be useful for stuff like GP appointments and MH treatment.

Our income is unchanged as one works in head office for a supermarket and one is a teacher. Our outgoings are reduced because no commute or lunches in the canteen for the office worker, and fewer family meals out, expensive day trips etc. I know we are very lucky and I know others who lost one or both incomes. But I don't think we are that unusual either - lots of people work in public sector roles, social care, retail, or in sectors that could easily move to online working.

Well said CreakingatTheWhinges
We’re in that comfortable bubble, but guess what.... no expected bonuses next year. That’s what paid the school fees. We have no financial help from family. One of the companies we work for will be shedding over 5000 jobs before 2021. Good, comfortable, professional jobs.
Yes, we’re saving money through not commuting, eating out etc.... but that’s going to be a splash in the ocean in 2021.

We've saved money due to dh not commuting (usually costing £200 pm), not eating out, not having days out to shopping centres and spending unnecessarily, and cancelled 3 abroad holidays at the beginning of the year, so have made up for that over the summer with a few short breaks away in UK. We have saved money mainly due to no commuting costs, so will probably put this towards house renovations as and when Covid allows. I know we are very fortunate in that dhs job hasn't been affected, he is busier, and has been taking on overtime, so actually earning more, and I work for one of the big supermarkets, so again, my workload has actually increased this year. I know everyone's situation is different, and many people have lost salaries/income during this, but ALOT haven't (look for example how many people Tesco/Asda/Morrisons employ as one example of people who won't have lost income) they're the ones who are "spending as normal"

Even those whose incomes are currently secure are a bit crazy to be splashing the cash

It depends on what you do. They aren’t going to be making nurses redundant any time soon.

MRex clearly nobody will be getting preferential treatment in a pandemic, nor should they etc. I was thinking more medium term, as it will surely be many years before nhs waiting lists recover, if they ever do, especially with the huge hit to public finances.

I imagine this will be the new inequality. Health insurance won’t help you once you’ve retired. Just a basic hernia operation outside the nhs costs more than £4,000.

And in fact even now, I know of two people who has ended up using savings to pay for themselves over this period because of delay - one with prostrate cancer. It’s a nice idea to imagine this isn’t possible but it is.

Also let’s not forgot the other shitstorm around the corner beginning with B. Very few people can be certain their earnings will retain their purchasing power atm, even if they keep their jobs.

My children are all key workers, two only just above minimum wage. They've all had their earnings increase because of there being no competition, increased hours because of isolation/childcare issues, or in the case of my Son in Law, extended contracts to free up the NHS. Their jobs are secure, if not were they work now, but in the same roles.

The lack of expenditure elsewhere has freed up money. I'm spending much more on Christmas decorations because I'll save a couple of hundreds because of theatres, cinemas, Christmas Markets, children's activities (for GC) not happening.

Some people on the bottom rung can splash out because they can't drop any lower. Some jobs will always exist and employers are now looking ar people in their 20's to recruit.

We're spending a bit less than usual, and earning about the same. We feel very fortunate to be in this position and we're saving as best we can in case things get worse for us and/or our loved ones after the transition period or in case of redundancy.

We have saved money as I usually have to drive half an hour to work so massively saved on petrol. Through lockdown my partner who is TA was on rota so we cancelled his bus pass and he just bought daily tickets or I drove him there/back so again a saving. Kids didn’t spend small fortune on school meals and we didn’t waste money on coffees etc out so saved. We spent the saved money on decorating our living room and putting down laminate and anew stair carpet. To other people it might look like we had loads to spare but it was only possible due to being able to cut back on what would usually be travel costs.

I work in revenue and benefits for a local council and can see there are many people hit financially by this pandemic it’s just awful. The football team my partner coaches for and daughter plays for have regular collections for any families that need help and anything left goes to local food bank so every pay day we buy extra and send it there as the thought of anyone going hungry or struggling for essentials such as toilet rolls, nappies etc is awful.

FIL has been on furlough since March and worried about losing his job and MIL on sick with anxiety but they still spending as usual and been on 4 weekends away through summer. We would not have done that as unnecessary spending but maybe that is what they needed to do to get them through a tough time so wouldn’t even consider judging them.

I had no idea so many ‘normal’ people were ok!! We are falling through the cracks here

I’m sort of surprised that you’re surprised Autumn. Most of the public sector, healthcare, adult care finance, education, tech, pharma, farming, construction, trades, food production and food retail (and all the associated admin jobs associated with jobs in that sector) is a lot of people.

However hospitality, leisure, live arts, beauty, “non-essential” retail and anything supported by advertising are also huge, so although thank heavens my friends and family aren’t in those sectors I can completely imagine how tough it is, and pray the treasury keeps the furlough coming, along with any additional support required.

DH had an extremely well paid job has been made redundant.

Our income and outgoings have been mostly unchanged, spending a bit less on petrol due to not visiting family and spending more on printer paper and ink. Our income was low anyway though so we weren't doing much non essential shopping or having days out/holidays etc.