Divergent COVID-19 concerns show different realities 

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While professional concerns are down by about 11%, family concerns have increased by just over 5% even though personal worries are stable. This data paints a picture of two different realities. 
 
 
 

Complacency and fatigue, or concern and grief? 

 
On one hand, some UK pension professionals report fatigue from ongoing restrictions and a growing desire to mingle and meet with close friends and family. The proportion of those open to attending in-person events has doubled in the last two weeks (to 32%). Some have even resigned themselves to thinking that they will get the virus, saying it is “only a matter of time”. 
 
 
 
On the other hand, some members in our COVID research panel report losing one or multiple friends and family members in recent days. This is a sobering reminder of the risk of contracting COVID-19 and not knowing how severe the disease will be. 
 
Others are worried about the optimism around vaccines, acknowledging that the end of the pandemic is still a long way away. Despite growing evidence that facemasks do protect their wearers and those around them, some members of our research panel report insufficient use of such protection in their local area. 
 

Is government guidance improving? 

 
The proportion of those who are ‘very’ or ‘extremely’ worried about the UK government’s handling of the pandemic has nearly halved to 28%. Does this reflect an improvement in government communications, or are UK pensions professionals simply happy that they get to spend Christmas with families and friends? 
 
 
 
Many still think guidance is not sufficiently clear, but some hope that the departures of Cummings and Cain will shift the focus away from “snappy slogans”. But the messaging around vaccines still needs improvement. In addition, some in our research panel view the government’s decisions, especially around Christmas, as political rather than grounded in data. 
 

Vaccine hopes cannot keep Brexit effects at bay 

 
While vaccine optimism is keeping the minimum expected duration of the outbreak and its economic consequences stable at under eight months and just over two and a half years from today, concerns are mounting about how Brexit will affect key macro rates. 
 
 
 
Four in five now expect taxes to rise, in order to pay for the pandemic stimulus – up from 68% two weeks ago. The proportion of those who expect interest rates to rise has nearly doubled to 44%, despite recognition that low interest rates will help the economy. Additionally, no UK pension professionals think inflation will fall anymore, as Brexit import costs are expected to affect it significantly. 
 

 

A sector rotation 

 
Sentiment on the COVID-19 sector ‘winners’ – IT, communication services and healthcare – is deteriorating, while improvements are seen in nearly every other sector. About 80% agree with the optimising outlook for the three ‘winning’ sectors, while about one in five are now bullish on consumer staples, energy, financials and utilities (see chart further below). This may be reflective of views that the rally since the March lows may be coming to an end – all while the UK has just witnessed the collapse of another major retail group, with no clarity on how lost jobs will be replaced. 


 

What does your reality look like in the ongoing COVID-19 pandemic? Click here to tell us in our bi-weekly survey. 

 
 

Previous articles in this series: 

 
 
 

About the COVID Concern Index 

 
This short survey helps gauge sentiment of our community on the pandemic. The results are distributed via the community newsletter. Until 31/08/2020, this was a weekly survey. From 01/09/2020, the survey shifted to a bi-weekly cadence. 
 
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: 
 
A methodology change took place on 06/10/2020, affecting data from 20/10/2020 onwards. 
 
Prior to 06/10/2020: 
 
  • Lowest possible value = 1 month 
  • Highest possible value = 6 months 
 
Following 20/10/2020: 
 
  • Lowest possible value = 1 month 
  • Highest possible value = 12 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 
 
Macro rates index: 
 
  • -100 = all respondents think rates will fall 
  • 0 = all respondents think rates will stay the same 
  • +100 = all respondents think rates will rise 
 
Sector sentiment index: 
 
  • -100 = all respondents think the sector will be a ‘loser’ in the pandemic 
  • 0 = all respondents see a neutral outlook for the sector 
  • +100 = all respondents think the sector will be a ‘winner’ in the pandemic 
 
Concerned about the coronavirus outbreak and its macro implications? Click here to take part in the bi-weekly COVID-19 survey.