COVID-19 concerns at an all-time high
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Personal worries are up by 12% in the last two weeks, exceeding levels seen at the start of the COVID-19 pandemic. With the NHS under extreme pressure and concerns about the safety of parents in care homes, it may be too easy to think this is just a deja vu – except personal concerns are 30% higher than they ever were, the coronavirus is mutating to become more contagious and supposedly more deadly, and UK pensions professionals now feel they are living in ‘dangerous times’.
A ‘significant’ disruption to life as we know it
Back in March 2020, our COVID research panel thought that the outbreak will be over in four short months. Not only did this forecast prove wrong, but they now expecte that the pandemic will last at least eight more months from today, which is already a whole 10 months after the start of the pandemic.
Rising anxiety putting a strain on mental health
As our COVID research panel reports more infections among family, friends and colleagues, there are doubts about the vaccination effort and the impact it will have, given the time allowed between the first and second dose. The "grinding continuation” of lockdown is ”sapping” mental energy, they say, with many now not expecting to:
- See family in person until May
- Meet friends or travel within the UK until June
- Go to the pub or see colleagues in person until July
- Attend a family gathering until August
- Hold in-person meetings until September
- Work from the office, attend in-person events or travel abroad until October
Government policy has UK pensions professionals ‘near panic’
The proportion of those ‘very’ to ‘extremely’ worried about the UK government’s handling of the pandemic has increased further to 72%, beating its record two weeks ago. Not only do some in our COVID research panel think the government have ‘no idea’ how to prioritise and communicate, but they are also worried about its ability to enforce rules and take timely action.
A new reason for dissatisfaction has been the delay in halting travel from South America to stop the Brazil variant of the coronavirus spreading in the UK, as well as the lack of mandatory quarantine facilities for travellers akin to those adopted in Singapore, Australia and New Zealand.
A drop in economic confidence
As the second wave of the COVID-19 pandemic continues with no end in sight, the minimum expected duration of its economic consequences has increased by 16% and extended to October 2023 – the longest since we launched the COVID concern indices. UK pension professionals expect the outbreak to weigh on consumer confidence and sponsor covenants, and damage certain sectors like travel, retail and hospitality beyond repair.
What do the next few months hold for the UK and global economy? Click here to tell us in our bi-weekly survey.
Previous articles in this series:
- 13/01: New COVID-19 strain makes pandemic spiral out of control
- 15/12: Another COVID summer on the cards despite vaccine rollout
- 02/12: Divergent COVID-19 concerns show different realities
- 18/11: The risks and consequences of COVID-19 complacency
- 04/11: Sharp rise in COVID-19 concerns before the second lockdown in England
- 22/10: COVID-19 outbreak to last at least until June 2021
- 07/10: Prolonged COVID-19 outbreak is putting pressure on covenants
- 23/09: How will the second COVID-19 wave impact UK schemes?
- 17/09: Trust in UK government dwindling due to COVID-19
- 26/08: Another step in adjusting to COVID-19 uncertainty?
- 19/08: COVID-19 outbreak to last at least until February 2021
- 12/08: Trustee sentiment around COVID-19 pandemic deteriorates
- 05/08: Relaxed attitudes towards COVID-19 threaten economic recovery
- 29/07: Does COVID-19 mean the ‘end of the world as we know it’?
- 22/07: COVID-19 could weaken covenants and raise taxes and inflation
- 15/07: COVID expectations set, except for economic recovery
- 08/07: COVID concerns rise as economic outlook improves - why?
- 01/07: Lockdown easing raises COVID concerns
- 24/06: The UK government’s COVID-19 guidance attracts criticism
- 17/06: COVID concerns shift to life after lockdown
- 10/06: Will lockdown easing cause COVID concerns to rise?
- 03/06: COVID concerns at an all-time low – is the worst over?
- 27/05: Personal COVID concern subsides – but this may be a problem
- 20/05: UK pension trustees worry there may be no ‘going back’ after COVID
- 13/05: UK pension schemes don’t trust the lockdown exit strategy
- 06/05: Concerns over duration of COVID lockdown and macro effects intensify
- 29/04: Professional COVID concern spikes by 18% as trustees brace for a longer lockdown
- 22/04: Macro effects of COVID to last until 2022, with personal concerns up by 10%
- 15/04: COVID concerns fluctuate – there is no path to normalisation in sight
- 08/04: The magnitude of COVID’s economic impact remains unclear
- 01/04: Have UK pensions schemes settled into the ‘new normal’ of COVID-19?
- 25/03: Rising levels of concern about COVID and a changing economy
- 23/03: What do pension funds think about the economic impact of COVID-19?
- 19/03: COVID-19: Government response divides pensions community
- 18/03: 96% of pension funds and trustees preparing for a long-term COVID-19 fallout
- 18/03: mallowstreet Flash Insights Report: COVID-19 – what’s on trustees’ minds
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.
