UK pension schemes don’t trust the lockdown exit strategy

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Personal concern over the COVID pandemic has ticked up by nearly 10% from last week and reached early lockdown levels, reflecting major concerns about the gradual lifting of restrictions.
 
While the minimum expected duration of the outbreak has decreased, the realisation that restrictions to personal liberties will continue is raising further concerns about mental well-being across age groups and different levels of COVID health risk. 

At the same time, UK pensions professionals are worried about unsafe behaviours if people bend the rules to appease their restlessness. There is a lack of trust that social distancing can be observed outside of lockdown.
 

Attention shifting to the speed of recovery 


The minimum expected duration of the economic effects of the pandemic has also decreased but concerns persist about the risk of defaults, limited government funding and potential economic collapse. But the attention is slowly shifting to the speed at which sponsors and the economy can rebound given the slow lifting of lockdown.

Facing permanent changes in how we work and interact


57% of our research panel expect the economy to look very different after COVID-19 – a percentage that has steadily increased since April 21.
 
We can reasonably expect permanent changes in how we work and interact: 

  • We have embraced technology and working from home, so many expect these options to be available to them out of concern for their health and safety 
  • Working from home more will go hand in hand with flexible working hours and home deliveries, potentially ‘rejuvenating’ the Royal Mail 
  • Companies may re-evaluate their need for large offices, but it is not clear how social distancing will be achieved at the workplace, so it is hard to anticipate the impact on the commercial property market 
  • The avoidance of commuting and shopping will either mean fewer or more cars on the road, leaving the impact on carbon emissions unclear 
  • Travelling for conferences, business meetings and holidays will be rare 

Looking beyond the day-to-day: 

  • Leadership around the world has been inept and global cooperation left lacking 
  • Countries are looking inward, which paves a path for de-globalisation 
  • It is unclear which countries will emerge as new leaders – perhaps those economies less affected by the global pandemic so far 
  • Tensions over unfair distribution of financial aid can escalate, with one respondent pointing out they have historically been fertile grounds for revolutions 

There are three areas where our research panel falls short of ideas for the future: 

  • Education facilities – priority is given to A-level students but there is no clarity for the rest 
  • Hospitals – one respondent is alarmed at the lack of biosecurity during a recent hospital stay 
  • Pubs – social distancing seems impossible in such a setting 

What steps should the UK take to come out of lockdown? What major changes in the economy do you expect to see? Click here to take next week’s survey.


 

Previous articles in this series: 


 

About the COVID Concern Index 


This short weekly survey helps gauge sentiment of our community on the pandemic. The results are distributed each week via the community newsletter. 

The COVID Concern Index values should be used as indication only and do not constitute advice. Their values are bound by the choices available in the survey on which they are based. 

COVID Concern Index:                                 

  • 0 = respondents are not worried at all                    
  • 100 = respondents are extremely worried                            

Expected minimum duration of outbreak:                                         

  • Lowest possible value = 1 month                              
  • Highest possible value = 6 months                           

Expected minimum duration of macro effects:

A methodology change took place on 15/04/2020, affecting data from 21/04/2020 onwards. 

Prior to 15/04/2020:      

  • Lowest possible value = 3 months                            
  • Highest possible value = 12 months                         

Following 15/04/2020:  

  • Lowest possible value = 3 months                            
  • Highest possible value = 60 months                         

Concerned about the coronavirus outbreak and its macro implications? Click here to take part in the weekly COVID-19 survey.