Trustee sentiment around COVID-19 pandemic deteriorates
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COVID concern indices are rising again, with personal and family worries leading the way with a 13% and 18% increase, respectively. The minimum expected duration of the outbreak has remained relatively stable, but each new week pushes the horizon out further. Is this a second wave or is the coronavirus here to stay?
‘Once in a 100 years’ event or permanent part of our lives?
Our COVID research panel now thinks that the outbreak will continue into 2021, so whether this is a second wave or a continuation of the first one does not seem to matter anymore. The survey shows that concerns about care homes and when a vaccine might be available have resurfaced.
There are also reports that COVID-19 tests now take longer than they did in July – results are available in five days rather than just two, which can create issues for the track and trace system that is in place. Noting that social distancing is not being observed strictly, respondents in our weekly survey expect their daily lives to be affected for a minimum of 12-18 months from now.
New challenges for the work environment?
The UK government’s guidance is still viewed as inconsistent and confusing, sending mixed signals to the public. As a result, nine out of 10 respondents in our weekly survey are working predominantly from home – a proportion that has remained largely unchanged in recent weeks. The prospect of attending larger gatherings still makes people uneasy: nearly three out of every four say they are uncomfortable with in-person events.
One of the key concerns is public transportation. Some in our research panel view it as high risk because face masks are not being worn by everyone. Others see adherence to rules and are additionally reassured by the currently low numbers of travellers.
But if the COVID-19 outbreak is not subsiding and pension professionals do not expect to return to ‘normal’ in the foreseeable future, they are left with new questions:
- how to stay connected and maintain relationships with colleagues and peers in the long run; and
- how to enable the kind of spontaneous learning and idea exchange that used to happen in hallways and in-between meetings.
The economic outlook is deteriorating
The minimum expected duration of the macro effects of COVID-19 has shot up by 33% - the biggest one-week increase to date. Our COVID research panel does not expect the economy to improve until at least the summer of 2023.
The percentage of respondents who expect interest rates to increase has doubled since last week. One member of our research panel expects stability in interest rates to become a barometer of how well the UK government and the Bank of England are managing the economic fallout. From this perspective, the fact that 32% of our COVID research panel expect rates to rise compared to just 15% last week may be a worrying sign.
The outlook on two sectors has deteriorated further, according to survey respondents. 45% now think energy is a likely ‘loser’ post COVID-19, compared to 33% last week. Financials are also tipping further into ‘loser’ territory, with 36% sharing this view compared to 26% last week. Considering that finance is one of the biggest sectors in the UK economy, this change adds to an already deteriorating outlook.
What do you make of the changes in this week’s data? Click here to tell us in next week’s survey.
Previous articles in this series:
- 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 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.
