One in five ‘think it will take years for their finances to recover from Covid’

One in five (19%) people think it will take several years for their finances to recover from the coronavirus pandemic, a survey has found.

This rises to more than a third (36%) of people who have been furloughed or made redundant, according to Nesta, a charity which awards prizes for innovation.

Nesta said its research suggests 18-to-24-year-olds are twice as likely to have been made redundant or furloughed than over-45s and, similarly, those earning between £20,000 to £30,000 a year are twice as likely as those earning more than £30,000 to be in this situation.

The research also found that four in 10 (40%) people who are currently out of work have been in this situation for more than six months, with men, people with disabilities and those without university qualifications particularly likely say this.

Three in 10 (30%) people said that constant worries about work during the pandemic have affected their mental health. And 41% of those who have been furloughed or lost their job during the pandemic said that their self-esteem has been affected.

Nesta released the findings, based on a survey of more than 2,000 people across the UK in April, as it revealed six organisations were finalists in its £3 million “rapid recovery” prize challenge.

Finalists will secure £150,000 each in funding to further develop ideas to help people access jobs and financial support.

They include initiatives that support young people trying to gain work experience, enable low paid workers to access earned wages early or alternative income sources such as grants, and help homeless and disabled people to find secure work.

Tris Dyson, managing director at Nesta Challenges said: “The jobs market has been entirely upended by the pandemic and although restrictions are starting to lift, there are still a large number of people who are furloughed or out of work – particularly among certain groups of society.

“There is an urgent need to get people back into work as soon as possible and prevent this becoming entrenched with all the mental and financial consequences that job insecurity brings.”

The six finalists are:
 
1. Beam.

Beam has a digital hub to give job seekers quick, clear access to help and contacts enabling them secure stable work. Its tools help people improve digital literacy and show how to navigate online applications. It provides employer lists for in-demand sectors such as healthcare and logistics.

2. Evenbreak.

Evenbreak’s “career hive” offers accessible careers support for disabled people looking for work. People can access bespoke careers coaching, attend events, find resources and search for jobs.

3. Hastee.

Hastee allows workers access to a portion of their pay as soon as they have earned it. It has created a personalised financial education tool, free to 16-to-24-year-olds in the UK, to help improve financial wellbeing.

4. IncomeMax.

It reunites low-income workers and young workers with sources of income available to them through unclaimed benefits, grants and other financial support such as help for utility bills.

5. Turn2us.

It enables users to receive quick financial support, reducing waiting times for financially vulnerable applicants.

6. Udrafter.

Students are paid to complete degree relevant micro-internships which give them work experience.

The rapid recovery challenge is funded by Nesta with support from JPMorgan Chase and the Money and Pensions Service.

Two final winners will secure £200,000 in September 2021.