Concern over the financial impact of the ongoing COVID-19 crisis on household income is on the rise, with more people in Hong Kong reaching out to financial institutions for help, according to recent TransUnion research.
TransUnion’s “Hong Kong Financial Hardship Survey” showed the impact of the pandemic on consumer income had worsened. Compared with a previous survey conducted in early May, 75% of respondents said their household incomes were impacted by COVID-19 – an increase of eight percentage points.
Among all generations, Gen X respondents aged between 41 and 55 had endured the highest level of impact on household income, up from 69% in the previous survey to 82%. In previous research, Millennials aged between 26 and 40 were the most impacted (75%).
For those who were impacted financially, over three quarters (78%) of respondents said they had been concerned about paying bills. Forty five per cent said they would be unlikely to pay their bills within one to three months. Credit card bills (46%) were the biggest concern for repayment, followed by rent (33%), insurance (30%), personal loans (27%), and mortgages (21%).
“Our last survey in Hong Kong in early May seemed to show that concerns over the financial impact of the pandemic were dissipating, but the perceived recovery now appears to have disappeared,” said Francis Lau, director of research and consulting for Asia Pacific at TransUnion.
“The financial impact of the virus was being felt hardest by those whose household incomes often have to support both their children and their parents. Their financial hardship was the most worrying (trend) in Hong Kong as their situations may affect other generations.”
To alleviate their plight, more consumers have proactively sought help from financial institutions than before. Over half (56%) of impacted consumers had reached out to companies to discuss payment options, a 13 percentage point increase compared with the last survey.
Companies had also offered more guidance to support consumers, with 63% (up from 59%) of respondents impacted commenting that some or all of the companies they had consulted provided advice for navigating financial difficulties.
As a result, 35% of respondents had received some form of financial accommodation.
Marie Claire Lim Moore, Hong Kong CEO of TransUnion, said: “We are beginning to see more consumers becoming more credit-aware and understanding better the diversified payment options that are available to them. That is a positive trend in this challenging time and helps protect long-term savings. The spread of the virus may have slowed in Hong Kong, but the need for financial education continues.”