The COVID-19 pandemic has taken a heavy toll on Hong Kong residents’ financial situation with many people now worried about whether they’ll still be able to settle their bills, according to a recent TransUnion survey report.
Out of more than 750 adults (in Hong Kong) that were surveyed in March of this year, about 78% noted that their household income had been negatively affected due to the COVID crisis, which is up significantly from 69% when the survey was performed in November 2020.
People responding to the survey said that fewer available working hours (47%), job loss (27%) and furlough (19%) were the main reasons for decreased earnings.
When compared to the survey results from November 2020, the percentage or number of consumers in households with someone losing their job increased by 14% from13%. Meanwhile, the percentage of people living in a household where someone had been furloughed increased three percentage points from 16%.
Of those that have been negatively affected due to COVID, a considerable 72% said they were worried about not being able to pay current bills and loans, and 42% think that the may not be able to pay them in full in less than a month.
When questioned about how they intend to take care of their financial obligations or outstanding payments, 44% said they’ll be dipping into their savings, 41% said they’ll have to borrow funds from friends or family, and 27% said they may apply for a personal loan.
The survey’s results suggest there’s been a significant change in how Hong Kong residents or households are managing their finances and planning for the future during these unprecedented times.
Consumers affected by the Coronavirus crisis made considerable changes in their credit and savings behavior, the report revealed. During the past 3 months, nearly 40% stated that they had been saving more than usual for emergencies, 30% reported lowering the amount they put towards their retirement fund, and 20% said they increased their usage of credit and even retirement savings.
Hong Kong residents also reported lowering their discretionary spending (66%). People have also been cancelling their subscriptions and memberships (29%). A significant number of consumers have also reduced digital services (28%) in order to survive during these challenging times.
Notably, 95% of survey respondents said they now think it’s vital to have adequate savings for unexpected emergencies or some other type of financial setback. Around 94% think it’s important to carefully monitor their credit as our environment has become quite unpredictable.