Only 11% of the UK adult population said their finances have improved over the past three months, according to the report from retirement and protection provider LV=.

Just over a quarter (26%) of those surveyed said they expect their finances to worsen over the next three months as drops in income continue.

The pandemic has also hit retirement plans with 13% of those survey saying that they have reduced the amount they are saving into a pension.

The survey shows that some are being forced into early retirement. Of those surveyed, 4% of people not retired at the start of 2020 said they have had to access their pension savings to make up for reductions in income or redundancy.

Others are having to delay their retirement plans. Almost one in ten (8%) of people not retired at the start of 2020 said a reduced income has meant they may have to retire later than planned.

The LV= Wealth and Wellbeing Monitor is a quarterly survey of 4,000 UK adults. The latest survey was conducted via an online omnibus by Opinium in December 2020.

Clive Bolton, managing director of savings and retirement at LV=, said: “Figures from the LV= Wealth and Wellbeing Monitor highlight just how difficult life has become for millions of people since the introduction of the second lockdown, and the finances of millions of people have deteriorated markedly since the summer.

“During the summer, loosening of lockdown restrictions led to an increase in consumer spending, a reduction in saving and an increase in spending on socialising. However, the second lockdown, increased company failures and redundancies are shaking consumers’ confidence and reshaping their attitudes to savings and spending.

“Many people are reducing their long-term savings into pensions, while some of those aged over 55 have even resorted to drawing money from their pension to make up for reduced incomes or job losses.”