From the Blog

An Insight Into July 2020

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To say that historians will not be short of material when it comes to writing about 2020 would be an understatement, and it is only August. In normal times, a combination of private space exploration, the annexation of Hong Kong and worldwide anti-racism protests would be considered remarkable. However, like many other events, these have taken place amid a global pandemic.

As lockdown eases and the UK’s economy begins to reopen, activity is slowly building and this should continue as time goes on. The hospitality sector had a significantly controlled restart, which has highlighted the difficulties we will face when trying to safely restart the entire economy. Social distancing remains compulsory, but many were able to celebrate on the 4th of July and ‘drink responsibly’ outside of their homes for the first time since March, which I am sure will be a day to remember from 2020.

Even though the pubs and bars have continued to be active since their reopening, there is still the ever-growing fear of a second wave in the background. There is a constant balance between on the one hand getting enough employees back to work to prevent businesses going under (which would of course result in job losses), and on the other hand, the risk of a dangerous second wave of COVID-19 that nobody wants to see.

With the lockdown seeming to be mostly coming to an end, and the government’s furlough scheme due to wind down over the next few weeks — which will bring an anticipated spike in unemployment — the UK will be facing considerable headwinds over the months to come. The future of trading relations with the EU will also have a decisive impact on the UK’s economic recovery and the strength of the pound.

Despite all this, the Chancellor announced earlier last month that he has a range of measures in place to help revive the UK’s economy. These include a VAT cut for hospitality businesses, incentives for employers to reinstate furloughed workers and create roles for young people, together with aid for the housing market.

VAT has been cut from 20 per cent to 5 per cent for hospitality businesses until January 2021, with the aim to encourage people to start spending more to make up for the drop in consumption spending during lockdown. In addition to this, there will be half-price deals this month on eating out between Mondays and Wednesdays to further encourage spending.

The ‘Kickstarter’ scheme announced by Chancellor Sunak is intended to support youth employment, and entails the government paying businesses to employ people aged 16 to 24. Meanwhile, businesses that bring furloughed workers back into employment will receive a £1,000 job retention bonus for each employee who returns to work.

The housing market is also being helped, with the announcement that the stamp duty threshold for home purchases has been raised from £125,000 to £500,000 until 31 March 2021. Sunak also revealed that homeowners will receive vouchers to fund green projects such as insulation.

A wide-ranging budget is scheduled for the autumn, and is expected to lay out in greater detail how the UK plans to put its finances on a sustainable, long-term footing. The government’s priority is to re-start the economy, stimulating recovery and preserving and creating jobs. Unfortunately therefore, the understandable public concern about how the ever-increasing government debt is going to be re-paid will be placed on the back burner until then.

The coronavirus pandemic has put our health firmly in the spotlight, with the use of facemasks and hand sanitiser now a compulsory part of our daily routine. Not only has this period increased awareness about the need for protection, it has also highlighted some differences in the attitudes of the population that we may not have noticed before.

Despite the enhanced concerns surrounding health, women still fall behind men when it comes to taking out financial protection. Research carried out last year found that 6 per cent of women have income protection compared with 10 per cent of men. Similarly, 10 per cent of women have critical illness cover, whereas the figure for men is 13 per cent. Life insurance is different, however, and men and women are more evenly matched with 30 per cent of women having cover versus 31 per cent of men, but there is still a difference in that women take out much lower levels of cover. On average, the amount taken out on life insurance by women is 53 per cent lower than for men, while for critical illness insurance, it is a staggering 90 per cent lower. (LifeSearch survey of 2004 UK adults, February 2019).

Research suggests that a general lack of understanding about protection is the problem. Women believe that their views on the need for cover change as they get older. Experiencing the death or serious illness of a loved one is also a trigger to re-evaluate their own situation. We must all hope that the threat to our health that this pandemic brings will decrease in the months to come. Looking beyond that immediate risk, these findings underline a growing urgency for women to have the peace of mind and reassurance that sufficient protection can bring.

Though normality seems a distant memory, we hope that each and every one of you is safe and well during these exceptional times. We are always here to help.

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