Concerns over the pandemic’s lasting impact on the world of work are growing

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The mallowstreet COVID-19 research panel is more concerned about the professional impact of the pandemic than the risks it poses to themselves or their loved ones. Many qualify this further, citing concerns over lower international vaccination rates and increased uncertainty about the pandemic’s long-term professional consequences. 
 
On the personal front, our panel is less concerned because many have already received their first vaccination jabs. Others are less worried about their family and loved ones as they have also been vaccinated and adhere strictly to lockdown guidelines. 

Renewed hope for a return to in-person events and international travel by the year end  

 
Pension professionals are confident that we will see a return to normality by the end of the year. In fact, many predict we will even be able to travel abroad by December, a noteworthy change from the sentiment two weeks ago. 
 
Overall, our research panel members expect to do most things listed in our survey far sooner than in previous weeks. These new projections are strongly anchored in Westminster’s proposed timelines for relaxing lockdown rules. One exception is working from the office, which is still predicted to resume at the end of the year. 
 
In addition to not travelling abroad before December and not working in the office before November, the panel also suggests that we should not expect to:

 
 

Pension professionals are not yet comfortable with in-person events  


One-third of  our panel members  are  ‘very’ or ‘somewhat’ comfortable with attending in-person events,  even though they do not expect this to happen until the latter half of the year. However, the majority disagree - 69% say they would be ‘very’ or ‘somewhat’ uncomfortable attending an event. Vaccine rates are making people feel safer but the prevailing belief is that we are still a long way from reaching herd immunity. 

Decreasing levels of worry over  Westminster’s pandemic guidance 

 
The proportion of pension professionals that are ‘very’ or ‘extremely’ worried about the government’s handling of the pandemic is in steep decline. As of today, only 4% of our panel feel this way. On top of that, nearly a quarter of pension professionals are now ‘not worried at all’ about the way Westminster is handling the pandemic. The majority of our panel still have some reservations though, with 73% saying they are ‘somewhat’ worried about the pandemic guidance.  

Higher inflation rates are unavoidable 


Our COVID research panel members are unanimous in their belief that we should expect to see inflation rates rise sometime within the next one to two years. The reasons driving this sentiment are varied. Some suggest that inflation will be tied to food costs, which will rise as a result of the Brexit settlement. Another view is that ‘revenge consumption’ in the retail and travel sectors will trigger pricing increases. 
 
UK schemes are also  predicting a near-term tax rise, but opinions are more divided on the subject, with only 69% expecting an increase. This statistic is noteworthy, representing a sizable decrease from the proportion predicting a tax rise two weeks ago. Some within our panel believe that any tax rise need only be modest; enough to help reduce the government debt load. Others predict that tax rises will mostly affect corporation tax rates and fuel duty, while pension tax relief and the lifetime allowance will be spared. 
 
With government spending on the rise and the UK rapidly approaching a phased re-opening of the economy, we will keep an eye on the results of these measures to see if they prompt our panel members to alter their macro outlooks.

 
What do you think about prospects for the economy going forward? Click here to tell us in our bi-weekly survey.
 

Previous articles in this series: 

 
24/02: Pension professionals urge caution as vaccination efforts continue 
12/02: High vaccinations rates bring down COVID-19 concerns 
27/01: COVID-19 concerns at an all-time high 
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: 
 
 
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: 
 
 
Following 20/10/2020: 
 
 
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: 
 
 
Following 15/04/2020: 
 
 
Macro rates index: 
 
 
Sector sentiment index: 
 
 
Concerned about the coronavirus outbreak and its macro implications? Click here to take part in the bi-weekly COVID-19 survey. 

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