Citizens’ Panels play an important part in the Bank of England’s (the ‘Bank’) engagement with the public. Over the past year, they have provided valuable insights into the day-to-day lives of people during one of the most challenging periods in recent times. These human stories complement and inform the Bank’s economic analysis, intelligence gathering by the Agents, and the policymaking process. Citizens’ Panels also give members of the public a chance to learn more about how the Bank maintains monetary policy and financial stability in the UK. It is crucial that transparent and open dialogue continues between the public and the Bank.
All people, whatever their background, should have opportunities to share their views and be better informed about the economic issues that affect them. At the Bank, we are committed to hearing from and engaging with as many people as possible from a wide range of backgrounds. We want to make our work relevant and relatable to people’s everyday lives. As well as our Citizens’ Panels, we are trying to do that by ensuring our external communications content is widely accessible, expanding our outreach and education programmes, and bolstering our presence in the regions and devolved nations.
The panel discussions raised a wide range of economic issues that fall under the Bank’s remit, such as inflation, interest rates, the housing market, and climate change. We really value these discussions.
We have many people to thank for the success of the panels. First and foremost, we are greatly indebted to the panellists from across the UK who participated and enriched our Citizens’ Panel discussions by sharing their views and, sometimes very personal, stories. Second, we would like to thank the Chairs for expertly and enthusiastically facilitating the panel sessions, bringing with them a breadth of knowledge and experience of the local economic and social issues in the regions and devolved nations where they are based. Lastly, we extend our thanks to the staff of the Bank who adapted to delivering the programme virtually as pandemic restrictions made in-person events impossible.
The coming months will see further enhancements to the Citizens’ Panel member experience. We are particularly excited for the launch of the new community online platform, The Economy Hub (sign up for more information), and the benefits this will bring to Citizens’ Panel community members, as well as the Bank.
The pandemic has had a profound effect on people’s lives around the world. Never has it been more important that public institutions hear from, and engage with, the people that they serve. Not only does this make for better policymaking, it also raises public awareness about these issues and the policy responses to them.
We live and work in communities across the UK. Our work across a range of public, private, and voluntary sector organisations gives us a good understanding of the economic and social issues on the ground facing people, day in, day out.
As independent chairs of the Bank of England’s Citizens’ Panels we have tried to facilitate open, balanced, and constructive dialogue between members of the public and the Bank. We believe this type of active engagement makes for better policymaking and helps to engage members of the public about the ways the Bank can support UK households, businesses, and the economy more generally.
We would like to thank our Citizens’ Panel members for sharing their lived experiences over the past year, some of which were deeply personal. These testimonies reach well beyond the economic data and media headlines to refine our understanding of the economic landscape across the country.
The panels are a barometer of everyday experiences of the economy at a point in time, drawing attention to the development of both emerging and ongoing economic and social issues. In chairing them, we also learned much about panellists’ hopes and aspirations for a more inclusive economy beneficial to all. We heard many innovative and creative suggestions about how to address the economic, social, and, for example, climate-related issues we discussed.
While we acknowledge that many areas discussed were beyond the scope of the Bank’s monetary policy and financial stability remit, such as public health and wealth inequality, we hope that this Chairs’ report will provide a helpful and useful summary of ongoing and emerging economic issues for all relevant policymakers.
Denise Bentley (Co-chair, Greater London)
Bridget Blow (Co-chair, West Midlands)
Jonathan Cheshire (Co-chair, Central Southern)
Fiona Devine (Co-chair, North West)
Sarah Green (Co-chair, North East)
Kate Hainsworth (Co-chair, Yorkshire and Humber)
Julie Hawker (Co-chair, South West)
Ruth Marks (Co-chair, Wales)
Josephine McCartney (Co-chair, South East and East Anglia)
Jim Minton (Co-chair, Greater London)
John McMullan (Co-chair, Northern Ireland)
Susan Rice (Co-chair, Scotland)
Stephen Singleton (Co-chair, South East and East Anglia)
Martin Traynor (Co-chair, East Midlands)
The Citizens’ Panel programme continues to provide Bank policymakers with valuable insights into people’s lived experiences of the UK economy. It represents a two-way conversation between the Bank and the public it serves.footnote  The programme was devised in response to the Royal Society for the encouragement of Arts, Manufactures, and Commerce’s recommendations, made in March 2018, to improve the Bank’s engagement with the public.footnote  This report from the Chairs distils qualitative and quantitative findings from the 13 location-based and five themed Citizens’ Panels that took place virtually between August 2020 and July 2021 with the participation of almost 500 panellists.footnote  In addition to location-based and themed Citizens’ Panel sessions over the past year, the Bank organised four Open Forum Citizens’ Panels where Andrew Bailey, the Bank’s Governor, and Executive Directors answered questions about the ways the Bank was supporting the UK economy to a total of 1,300 members. Since the programme’s inception in November 2018 to July 2021, the Bank has organised a total of 45 Citizens’ Panel sessions with almost 2,800 panellists from across the UK sharing their views and experiences.
This report builds on the findings of the previous Citizens’ Panel Annual Report that covered the period between November 2018 and February 2020. Discussions this time around offered reflections on panellists’ prolonged experiences of a global health crisis with unprecedented and far-reaching economic and social consequences, as well as on Brexit and other issues. Citizens’ Panel discussions have been wide ranging, reflecting the diverse experiences and concerns of members over the period in question. This report explores the key themes raised in these panel discussions in the following sections:
Like the 2020 Citizens’ Panel Annual Report, two consistent and related themes throughout the panel discussions were uncertainty and insecurity.
As the UK withdrew from the European Union (EU) on 31 January 2020, initial views about the impact of Brexit were quickly superseded by news of the alarming spread of Covid-19 (Covid) in early 2020, which caused the global economy to grind to a halt. Citizens’ Panel discussions immediately following the first UK-wide national lockdown in late March 2020 were marked by acute concerns about the pandemic’s extensive impacts on the UK economy, such as job security, in the short term. As the first national lockdown was extended to tackle the spread of the virus, panels from August 2020 onwards began to consider the medium and long-term effects of Covid, particularly the structural changes to ways of working, business models, patterns of consumption, the housing market, the future of cities, and inequality.footnote 
Those able to work from home highlighted the initial and ongoing adjustments to virtual working. This cohort of panellists explained that working remotely improved their work-life balance and many even saw their savings increase because of a reduction in work-related expenses. This was not the picture universally. Some panellists spoke of their salaries being cut, being furloughed or losing their jobs as a direct result of the pandemic.footnote  They lamented the strain of job insecurity, finding a new job or getting the relevant government support. Panellists felt that the squeeze on workers’ salaries and the perceived rise in the cost of living associated with Covid and Brexit created a class of ‘working poor’. As with the previous Citizens’ Panel Annual Report, panellists believed that official employment statistics disguised the prevalence of low-paid and zero-hours contract jobs.footnote  Panellists agreed that Covid would have negative impacts on young people’s career prospects and progression. Low-income households or households with no employment were subjected further to the vagaries of economic volatility.
Panellists generally agreed that Covid had exposed underlying social inequalities in terms of job security, financial stability, access to economic opportunities, and housing. The North-South divide referred to in the previous Citizens’ Panel Annual Report appears to have been less pronounced in discussions this time around, perhaps because of the extensive impacts of the pandemic across the UK. There were calls for more investment by central and local government in areas that had been disproportionately hit by the pandemic and Brexit to adjust to the emerging structural economic changes.
Discussions from early 2021 onwards indicated an expectation that the Covid pandemic and, in the medium and long term, Brexit would create inflationary pressures. Panellists from regions outside London said that as virtual working became a potentially permanent fixture of the modern economy, they had noticed house prices rising sharply because of an influx of people from large urban centres to market towns and rural areas. They feared that an overheating housing market, where demand outstripped supply, would put a strain on local services and make homeownership increasingly unaffordable for local people.
Across the location-based panels and the two dedicated climate change panels, panellists offered their views on how individuals, businesses, the Bank, and the Government could help to tackle climate change. For many, climate change was viewed as being the next major source of global economic instability if not addressed robustly. Panellists acknowledged that creating a green economy would be a boost for jobs, innovation, infrastructure and growth.
Panellists generally recognised that it did not fall exclusively to the Bank to address all areas of structural economic adjustment, economic and social inequalities, housing affordability, and climate change. There was, however, broad agreement that the Bank should explore if there were new ways to measure the nation’s economic health, reflecting issues such as environmental sustainability, public health, and inequality.
The Bank remains committed to hearing about the experiences of the diverse voices of the public it serves through the Citizens’ Panel programme. These panel discussions invite UK-wide members to share their experiences of all aspects of the economy either in location-based or themed panels with the Bank. These enable the Bank, as well as other policymakers, to understand how the economy impacts UK households and businesses across the country. The intelligence gathered from the panels also complements the work of the Bank’s Agents in engaging with local businesses and communities.
The past year has continued to generate some valuable insights captured from the Citizens’ Panel discussions, as well as through the Bank’s other outreach activities (see the Spotlight section below). The Bank’s key publications, such as the quarterly Monetary Policy Report and the Financial Stability Report along with its online KnowledgeBank, have strived to make the work of the Bank as widely accessible as possible to more people. The Bank has also continued to expand its education programme in an effort to raise levels of financial literacy.
Box A: Spotlight: The Bank’s other outreach programmes
Youth Forum: In July 2019 the Bank began a partnership with the British Youth Council to launch its Youth Forum. Its purpose is to provide a new mechanism for the Bank to engage with young adults, who it has traditionally struggled to reach through other forums. By creating a community of young citizens, the Bank can gain insights on a range of issues from policy matters to improving how it communicates with young people. This year the Youth Forum’s 25 members from across the UK have focused their projects on financial education, the impact of Covid on the labour market, and employment opportunities for young people and youth engagement.
Community Forums: The Bank has a particular interest in engaging with underrepresented and lesser-heard groups from all communities across the UK. A Community Forum is where the Bank partners with a charity or organisation to deliver a forum to hear from those who work in third-sector organisations and their beneficiaries. Between August 2020 and July 2021, the Bank hosted 13 virtual Community Forums where it engaged with 110 charity leaders and volunteers to learn about the impact of Covid on the third sector and those they serve. The key issues arising from these discussions included increased levels of demand on services particularly foodbanks, increased levels of debt and reliance on payday loans, barriers to basic services, and the disproportionate impact of the ‘digital divide’ across the UK. Many charities stated that this was just the start and that the full impact of the pandemic would be felt for many years to come resulting in a need for more funding and support across the whole of the third sector.
When the last Citizens’ Panel Annual Report was published in May 2020, the UK was facing one of the most turbulent periods of its economic, political and public health history. Having departed the EU on 31 January 2020, the UK economy was buffeted by the spread of Covid a few months later. The prospect of economic paralysis, as a result of a global health crisis, pressed the UK Government to take unprecedented measures to protect the economy and millions of jobs.
Covid inevitably affected the delivery of the Citizens’ Panels, which had previously been held in-person in community venues across the UK. The Bank subsequently adapted to a virtual format for Citizens’ Panels that has proved popular judging from members’ feedback. Members said they found it easier to join virtual sessions and that they were more inclusive, especially for those who would have been unable to attend in-person events. 50% of members polled said they would prefer to attend virtual events in future, while 57% said they would prefer to have the option of attending either an in-person or virtual event.footnote  Even with pandemic restrictions easing in the middle of 2021, 73% of members said they would continue to attend virtual Citizens’ Panel events. The Bank is exploring a hybrid model of in-person and virtual events in future to ensure its events remain as inclusive as possible.
While the Chairs and the Bank have found these panel discussions enlightening, it is encouraging to learn that panellists have also found the sessions beneficial. In a feedback survey completed by Citizens’ Panel members, 97% agreed or somewhat agreed that the events were interesting and relevant to their work or lives, 81% agreed or somewhat agreed that they had increased their understanding of the economy, and 90% agreed or somewhat agreed that they had increased their understanding of the Bank (see Chart 1 and excerpts of members’ feedback below).
Chart 1: Panellists’ feedback on Citizens’ Panel sessions (a)
Panellists’ feedback about this set of Citizens’ Panels was very positive overall
Box B: Citizens’ Panel members’ feedback
‘I think it is excellent that the Bank is engaging like this. I gained a greater understanding of finance and appreciated the open interaction between the Bank and regular people’ – Danny, North West England.
‘That the Bank is making a real effort to engage with people of all ages not just business is promising’ – Marion, North East England.
‘You need to attract a more diverse range of people including younger age groups’ – James, Wales.
‘The Northern Ireland Citizens’ Panel was well organised with good time to discuss topics and a good selection of members. Difficult to improve a winning formula’ – Mike, Northern Ireland.
‘The Bank is already active and looking out for the concerns that most people had, which was quite unexpected. For example, I didn't know that the Bank would be thinking much about climate change, but it does’ – Krishna, Central Southern England.
As with previous panels, a senior member of Bank staff (either a Governor, Executive Director or Director) was usually in attendance, alongside the relevant Bank Agent representative for the region or nation, and an independent Chair similarly with links to the region or nation. The Chair and Agent would explain the purpose of the Citizens’ Panels to panellists before they were divided into virtual breakout groups of between five and seven panellists. Over two sessions, a Bank facilitator would ask panellists about their experiences of the economy after which they would feedback a short summary of the main themes raised to the wider group. The sessions concluded with panellists being invited to ask Bank staff about the issues discussed in their breakout group or broader economic topics of interest to them. The virtual format enabled senior members of the Bank, Agents, and Chairs to move between breakout groups with ease to get a broader sense of discussions taking place.
Panellists who participate in Citizens’ Panels are drawn from a pool of registrants who have signed-up to take part on the Bank’s Citizens’ Panel website. The Bank gives all registrants a fair opportunity to join these sessions and share their views. Where possible, the Bank ensures that each location-based and themed panel is as demographically representative as possible for a balanced discussion. The Bank continues to work on expanding the diversity of the Citizens’ Panel membership base (see Final reflections and next steps).footnote 
The findings of Citizens’ Panels over the past year build on the already rich insights that were captured from previous panel discussions. While it may take decades, if not years, to unpack and understand the profound changes to the UK economy, this report sets out some preliminary findings from Citizens’ Panel panellists about the immediate economic impacts of Covid and Brexit.
Citizens’ Panel member Charlene Maines explains what the panel discussions have offered her
Hi, my name is Charlene Maines and I’m a member of the Citizens’ Panels for the Bank of England. As a charity founder and as someone who has experienced long-term unemployment with limited financial knowledge, it was a great opportunity to learn from others and to connect with people from across the UK and to learn about their backgrounds and to increase my own financial knowledge. If you’re thinking about joining the Bank of England’s Citizens’ Panels, please do so. Check out their details on their website.
Uncertainty about the UK’s economic outlook was a recurrent theme of Citizens’ Panel discussions that took place between August 2020 and July 2021. This was compounded by two factors. First, the uncertainty throughout 2020 created by the UK-EU trade negotiations in the run-up to the 31 December 2020 deadline. Second, and more significantly, was the alarming spread of Covid and the impact of the second and third national lockdowns, in addition to local lockdowns. These national lockdowns, which took place from November 2020 to December 2020 and from January 2021 to July 2021, had a significant impact on an economy that was still recovering from the first national lockdown in the first half of 2020 and a global economic downturn. Panellists’ optimism generally diminished further as these lockdowns took their toll on the economy. Chart 2.A shows that panellists were largely pessimistic about the prospects for the UK economy over the next six months when asked. Chart 2.B illustrates that panellists’ pessimism was more pronounced at the end of 2020 although this gradually declined in the spring of 2021 (but remained significant) as restrictions were phased out in stages.
Chart 2.A: Panellists’ outlook for the UK economy (a)
Question: How optimistic or pessimistic are you about the UK economy over the next six months?
Chart 2.B: Time series of panellists’ outlook for the UK economy (a)
Question: How optimistic or pessimistic are you about the UK economy over the next six months?
Panellists generally agreed that Covid created uncertainty for growth and jobs, especially in sectors such as retail, hospitality, leisure, tourism and the arts. This was especially disproportionate in localities where these sectors predominate. The pandemic, in their opinion, exposed some of the underlying issues in a labour market that had over recent years become increasingly characterised by low pay and zero-hours contracts (see Labour market). There was notable concern, especially among parents and grandparents, for the career prospects of younger people, as well as those already on low incomes. One young panellist in Scotland said the lack of summer work in 2020 meant that she was starting university with less financial security than she had expected. Although some panellists welcomed government-backed job support schemes, others, particularly the self-employed, freelancers and business owners, felt that this support was inconsistent or difficult to access.footnote  These difficulties only added to the immediate economic uncertainties created by the pandemic.
According to panellists, the decline of the high street was apparent across the country. Many doubted the survival of small and medium-sized businesses because of the prolonged closures of non-essential shops dictated by the national and local lockdowns. For this reason, panellists, particularly in South West England and Scotland, said they had or would shift their spending locally to support local jobs and businesses even if this was more expensive than buying from larger stores or online. Although many had transferred their spending online to respond to lockdown restrictions, as the roadmap out of lockdown became clearer by Spring 2021, many said they wanted to get back out to spend their money, particularly in their local community.
Business owners on the panels said the pandemic had forced them to reassess their business priorities and, where possible, encouraged them to innovate and diversify. Up and down the country, panellists reported many businesses having to adjust to the challenging economic climate by either adapting their business models or the services and/or products they supply. Panellists who run services businesses spoke about adjusting to delivering their services online. One business owner panellist from South West England explained how she diversified into the rental bike market as people opted to remain in the UK for their holidays. There were many encouraging instances of business resilience, creativity and versatility to overcome the challenges that the pandemic created.
With the rollout of the UK vaccine programme in Spring and Summer 2021, cautious optimism about the UK economy returned. The Government’s road map of lockdown in February 2021 established a phased end to pandemic restrictions if certain conditions were met. Panellists, however, continued to express concern about the economy opening up and questioned whether pre-pandemic ‘normal life’ could resume as things had changed irrevocably. The delay of lifting the final lockdown restrictions on 21 June 2021 to the following month underlined how volatile the public health situation, and by extension the economic situation, could be from one week to the next.
Panellists who joined Citizens’ Panel events in the first half of 2021 believed that a consumer spending-led recovery would give a much-needed boost to the UK economy as lockdown measures eased. Those who held back from normal levels of spending or who were fortunate enough to accrue savings expected their spending to return to normal levels as commuting, office-based working, leisure, entertainment and travel resumed. Some panellists said that the uncertainty created by the pandemic had encouraged them to build up their savings and pensions to provide a safety cushion for any potential future economic volatility. There was some concern about what would happen to jobs and businesses dependent on the Government’s economic support measures when these were withdrawn in the second half of 2021.
As national lockdown restrictions eased in the middle of 2021, some panellists were seeing the economic benefits. For example, panellists working in the manufacturing sector in the West Midlands (June 2021) said that their order books were surprisingly strong, although whether this was a result of pent up demand or a genuine increase in demand as normal economic activity returned was yet to be seen. Others spoke about the reduction in disparities between urban and rural areas as the prevalence and expansion of homeworking removed the previous hold that urban areas had on employment opportunities. This could, panellists agreed, lead to a more balanced distribution of these opportunities and wealth across the UK.
Panellists conceded that the full impact of Covid on the economy and people’s lives were unlikely to be known for a long time. Panellists welcomed some of the positive consequences of the pandemic, namely homeworking, a better work-life balance, more flexibility to work where people wanted to live, and even, for those fortunate enough, increased savings. However, they also highlighted the longer-term negative impacts of the pandemic on the economy and government finances. In the short term, panellists spoke about the economic ‘scarring’ the pandemic had created in relation to the structure of the UK economy, the labour market and the housing market.footnote  While panellists agreed that the Government took necessary steps to protect the UK economy and jobs, this would come at a considerable cost to future generations in the form of tax rises. Panellists also feared the prospect of public spending cuts to bring down the national debt, potentially inflicting damage to public services.footnote  Panellists raised concerns about the rising levels of inflation attributed to the pandemic and Brexit, citing food supply blockages, labour shortages, and supply chain issues. Many of these views were expressed at a time when inflation was below the Bank’s 2% inflation target before a sustained rise from February 2021 onwards (see Chart 3). Some also raised concerns about the possible impact on inequality of the Bank’s quantitative easing programme that increased to £645 billion in March 2020, £745 billion in June 2020 and to £895 billion in November 2020, as the crisis deepened. Some panellists felt that the pandemic masked the adverse economic effects of Brexit that would gradually emerge as the pandemic waned and have long-term impacts. Finally, the pandemic had attuned panellists to climate change issues that many believed would be the next major disruptor to economic stability (see Climate change).
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Conversations about the uncertain economic outlook for the UK were tied to people’s expectations for inflation and living standards. Panellists broadly agreed that the pandemic and Brexit contributed to higher inflation and negatively impacted living standards across the UK, although personal experiences were very mixed. Panels in late 2020 and early 2021 raised concerns about faltering economic growth, rising food prices and the prospect of increasing unemployment. As the economy tentatively reopened in the first half of 2021, discussions centred on consumer spending-led economic growth and attendant inflation, as well as the continued prevalence of low-paid and zero-hours contract jobs. Panellist discussions highlighted the varying levels of living standards across the UK, although many agreed that rises in price levels and shrinking household incomes were eroding living standards across the UK. Panellists nuanced these views to show that, while living standards certainly fell for some sections of the population, there were both financial and non-financial improvements in living standards for others.
As highlighted in the previous Citizens’ Panel Annual Report, the economic data and panellists views about the cost of living were often at variance. Food inflation, supply shortages, quantitative easing, and an overheating property market were viewed as having contributed to higher prices. Business-owning panellists also reported inflationary pressures due to the labour and supply shortages created by Covid and Brexit. Panellists feared inflation would continue to rise as the impacts of the pandemic and Brexit unfolded in 2021 and beyond. Chart 3 shows that the 12-month Consumer Price Index (CPI) inflation rate fluctuated between 0.2% and 0.7% from August 2020 to February 2021, after which it increased to 2.5% by June 2021 before falling to 2% in July 2021.footnote  Therefore, for much of the period covered by this set of Citizens’ Panels inflation was below the Bank’s 2% inflation target.
Chart 3: Twelve-month CPI inflation rate between August 2020 and July 2021 (a)
CPI inflation was below the Bank’s 2% target between August 2020 and April 2021
The combination of economic contraction, job insecurity, and inflation, panellists believed, had materially worsened household incomes and living standards. Government economic support schemes had helped, but panellists felt there was a growing number of ‘working poor’, unable to cover their living and housing costs comfortably. Across several of the discussions, panellists recounted how the demand for food banks by the unemployed, those on low incomes, and even professionals had increased since the pandemic started. One Greater London panellist (July 2021) described food banks as a ‘growth industry’ despite lockdown measures easing and the economy reopening. All of the uncertainties created by the pandemic, panellists felt, were leading to mounting mental health problems for people who had to adapt to the lockdowns and those who would have to readjust to their ending. Panellists working in the third sector noted worryingly that the demand for charity services for mental health and debt management had increased markedly.
Panellists who were fortunate enough to be in stable employment and able to work from home, reported an overall improvement in their living standards in both financial and non-financial terms. The reduction in work-related expenses meant that employed panellists had the opportunity to save more money. The reduction in their retail, leisure, entertainment, travel, and (for some) childcare expenditure because of pandemic restrictions also allowed them to accrue additional savings. However, a fall in household consumption did not automatically mean that everyone was able to save. Panellists remarked that expenditure on food and energy from being at home more had increased noticeably. Overall, many panellists said that while they enjoyed the financial benefits of homeworking, they were equally grateful for a better work-life balance despite the initial challenges of adjusting to homeworking.
Panellists not only reported shifting their spending online for both essential and non-essential items because of the pandemic, but what they were buying was also changing. These developments were a direct result of the pandemic. Economic uncertainty put off some panellists from making big-ticket purchases, although others continued making medium-ticket purchases, such as home improvements and exercise equipment. Panellists remarked that moving to online shopping had made them more discerning as consumers by shopping around for internet deals. Many reported that as soon as it was safe to do so, they would start buying locally to support jobs and businesses in their community.
Panellists remarked that their consumption choices were increasingly informed by ethical and sustainability considerations. The pandemic had made some panellists reassess their priorities, goals, and wider concerns about sustainability. Some felt the pandemic was an opportunity to reset people’s consumption so it was more sustainable and balanced in future. Indeed, some panellists felt the pandemic had improved community cohesion and altruism, which was better for overall wellbeing and living standards.
Economic uncertainty created by the Covid pandemic and the post-Brexit adjustments, job insecurity, shrinking household incomes, and structural changes to how and where people work were collectively identified as having exacerbated deep-rooted economic and social inequalities. Panellists shared their direct experiences of declining living standards. For instance, some spoke about having to accept wage cuts to support their employer, while others felt inflation had eroded their incomes. Better-off panellists spoke about having to financially support members of their extended family or subsidise their children’s incomes in a way that had not been seen in generations. One panellist close to retiring age explained that she was having to delay her retirement as she was unsure whether her pension would cover both her rent and living costs. The living standards of women, ethnic minorities, those on low incomes, single-parent households and young people were acknowledged to have suffered disproportionately. One of the noticeable omissions from panel discussions was the North-South divide in living standards and inequalities that was a theme of Citizens’ Panels in 2018, 2019 and early 2020; arguably, the pandemic’s undiscriminating impacts were extensive across the UK and all sectors over the past 18 months. That said, some panellists felt that the North-South divide had been replaced by the widening gulf between the rich and the poor.
Panellists, particularly retirees and savers, lamented the current low rates of interest on their incomes. As part of its response to the pandemic, the Bank cut interest rates to 0.1% in March 2020. Low interest rates had reduced the accrued interest for many retired people living-off savings, fixed-income assets and/or pensions.footnote  As many in this age group were relatively risk-averse, they were often reluctant to seek higher returns from alternative investment opportunities or had limited knowledge of these, such as shares or digital currencies. Retired panellists said that their pensions enabled them to live comfortably during the economic turbulence created by the pandemic, although they were often having to supplement the incomes of children or grandchildren who had lost their jobs or had their salaries reduced. Retired panellists in rural areas, particularly in Northern Ireland, Wales and Scotland, noted the decline in their living standards because of rising energy prices.
Despite concerns about rising inequality, panellists were able to appreciate the potential long-term benefits of some of the structural changes to the economy brought about, or accelerated, by the pandemic. For example, panellists in Northern Ireland and Wales said that homeworking (where feasible) would reduce the economic disparities between large urban centres that had been the stronghold of employment and rural areas as people had more flexibility to choose where they lived and worked. This development could redistribute wealth and employment opportunities, as well as improve living standards and reinvigorate local communities.
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Debt, credit and banks
While panellists welcomed the unprecedented measures the Government had taken to keep the economy afloat, the increase in the national debt was a major source of concern. Panellists feared that the two-pronged approach of raising taxes and cutting public spending would have a disastrous impact on an economy that was struggling to recover from the pandemic and the potential economic challenges presented by Brexit. Hikes in taxes, they felt, would stifle growth and eat into already eroded incomes because of inflation, while cuts to public spending would weaken essential public services, in particular the NHS, social care and policing. Panellists said this was not sustainable in the long term but accepted that such debts would have to be paid off. Panellists did not necessarily elaborate on why they felt a high level of national debt was a bad thing.
Conversely, panellists were acutely aware of the dangers of household and corporate debt. Job insecurity, cuts in incomes, and rising living or business input costs, as well low interest rates, made borrowing an attractive prospect in the short term. In the long term, it was unclear how this debt would be cleared. One panellist from Wales, who chairs a local credit union, described how he was seeing an increase in loan applications from furloughed employees being rejected on grounds of affordability in the run-up to Christmas 2020. The same panellist described how demand for smaller loans had increased from those in the most precarious financial situations. This created a dangerous cycle of unsustainable household debt. Corporate debt was also raised, as panellists considered how businesses would be able to shift the mounting debt they had built up over the duration of the pandemic. While government economic support loans were helpful, some panellists felt that they did not always reach the businesses they were intended to assist.
According to panellists, the uncertain economic climate and boom in the housing market during the Stamp Duty holiday led to a reduction in credit availability for some categories of borrowers.footnote  Despite record low mortgage rates, panellists eager to get on the property ladder complained about being unable to secure a mortgage because of the rise in demand or because they felt banks’ lending requirements were becoming more stringent because of the economic uncertainty (see Housing).
Discussions around the uncertainty of the UK economic outlook did not touch on financial system instability or concerns about the safety and viability of retail banks. This may be a consequence of the additional regulations that the Bank put in place following the 2008–09 global financial crisis to ensure retail banks have sufficient capital cushions and lend responsibly within their means. Chart 4 shows that attendees at a Citizens’ Panel Open Forum discussion with Governor Andrew Bailey and Deputy Governor Sam Woods in January 2021 were overall confident that the UK financial system was able to provide them with the services they needed in 2021.
Chart 4: Panellists’ level of confidence in the UK financial system (a)
Question: How confident are you that the UK financial system will provide you with the services you need (eg mortgages and business loans) in 2021?
Panellists, particularly in North West England, Wales and Northern Ireland considered the future of physical money. Some said that they hardly ever used cash before the pandemic and that the Covid hygiene measures hastened the decline of physical money making a cashless society increasingly more likely. Panellists noted that even small businesses, such as market traders and window cleaners, were now accepting electronic payments which negated the need for physical cash. That said, panellists, as highlighted above, did not mention using digital currencies because they had limited knowledge about these, thought these were too volatile or were concerned by the lack of Bank and government regulation. Likewise, panellists acknowledged that some people continued to use cash as they were not confident using electronic payments or purchasing items online, did not have a bank account or preferred using cash as a method of managing their finances.
Panellists in rural areas, particularly in parts of Yorkshire and Humber, East Anglia, and Wales, lamented the closure of their local bank branches and the reduction of counter services. These, usually older, panellists reluctantly switched to online banking out of necessity during the pandemic. While this group of panellists agreed it was convenient, they said they would return to going into their local bank branch post-pandemic as they missed the interactive, dedicated face-to-face service. Panellists, especially those with caring responsibilities for elderly relatives, voiced concern about the digital exclusion of older people as this could create barriers to accessing banking or other essential services.
Extensive discussions about employment across the location-based panels led the Bank to organise two dedicated labour market Citizens’ Panels in September 2020. Employment was one of the predominant themes because of its importance in financial and non-financial wellbeing, the structural changes to the way people work and its importance to the UK’s economic health. These discussions focused on how changes in the labour market had impacted workers in a variety of ways, from their incomes to their mental health.
Business owners and the self-employed said that the effects of Covid were uneven and largely dependent on the nature of individual businesses and the sector they operated in. Panel members included business owners and self-employed people working in accounting, marketing, manufacturing and coaching. When the first national lockdown was announced, they all experienced a decline in sales or new contracts almost overnight. There was a feeling of panic because they would need to adapt or diversify their business models in order to survive. When asked about future investment plans, this group said they were cautious because of the economic volatility and uncertainty.
Business owners and employees expressed relief at having the furlough scheme to rely on during economically unprecedented times. Most businesses were grateful and impressed with government support schemes, notably the Coronavirus Job Retention Scheme, the Coronavirus Business Interruption Loan Scheme and the Eat Out to Help Out Scheme. Government-backed furlough schemes provided temporary financial support to workers who were unable to do their jobs because of Covid restrictions. Those on furlough were reassured by the initial safety net that these schemes provided but missed the routine and stimulation of their jobs. As time progressed, many feared the survival of their employer and the prospect of possible redundancy, creating additional uncertainty and a loss in their confidence.
Although economic uncertainty was a dominant theme in relation to the economy and workforce, some saw the pandemic as resetting the UK’s approach to working patterns. Panellists who were able to work from home conceded that in spite of the initial challenges, virtual working was viable and had unexpected benefits. For instance, many said that their work-life balance improved because they could fit work around their lifestyles, and many had made significant savings, eg on the cost of commuting. Business owners explained that the pandemic was the impetus for them reassessing or diversifying their businesses. Some were even able to improve their business prospects as a result.
Panellists able to do so had adjusted well to working from home or split-site working, although around half of the 46 panellists who took part in the two dedicated labour market panels were keen to get back to working in the office. Panellists did not cite productivity as a reason for wanting to return to an office-based environment. Instead, they said that an office environment offered them a professional, safe and secure working environment, in addition to better infrastructure (eg internet and phone) and more interaction with colleagues. It also alleviated the burden of juggling work and home life. While some panellists said that homeworking could have mental health challenges and that it was difficult to monitor staff welfare, panellists were able to appreciate the overall benefits. Some panellists said that as all colleagues were in the same boat, it made for a more inclusive work environment and removed barriers between full-time staff and those who were working part-time or remotely before the pandemic. Panellists also said that remote working could increase geographical labour mobility, potentially opening up more opportunities to people, especially those living in rural or remote areas.
The Chairs and the Bank heard from a number of panellists who were actively looking for work. Some had been made redundant as a result of the Covid pandemic; others had become unemployed because of company restructuring before the pandemic hit. Some panellists aged over 55 explained that because of the pandemic and ongoing health concerns about commuting into work and being in their workplace, they had left the workforce and had not returned. These panellists also believed that it would potentially be more difficult to find work if they chose to return to the workforce post-pandemic. Other panellists were keen to return to the labour market and spoke about the need to feel they were building up their finances, contributing to society and looking after their mental health. One group of panellists spoke about the need for better financial education to help those who found themselves out of work adapt more quickly to their new circumstances. One unemployed panellist said that although she applied for several jobs, most paid the minimum wage and did not cover her household outgoings. Consequently, she was trapped in a vicious debt cycle. Many panellists said that being unemployed created significant mental strain because of anxiety, insecurity and lack of financial stability. Panellists generally agreed that Universal Credit welfare payments were inadequate to cover living and housing costs and that this should be more generous.footnote  One panellist felt that the case for a Universal Basic Income was strong based on her and others’ experiences of being unemployed.footnote 
As business activity picked up during 2021, panellists had noticed that recruiting members of staff was becoming difficult, while others were worried by unemployment rising after the government support schemes ended. One panellist who works in recruitment in the East Midlands reported in May 2021 that the recruitment market was picking up as the economy reopened. Another from North West England (June 2021), said that the hospitality sector was struggling with recruiting staff and rising labour costs, citing a restaurant that had to close two days a week because of the shortage of available chefs. Panellists suspected unemployment would potentially rise after government economic support measures were withdrawn completely by the end of 2021.
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The dedicated housing Citizens’ Panel took place in February 2021 to hear panellists’ views about the housing market, although views on housing were also shared consistently across the location-based panels. Forty members joined the panel. As well as colleagues from the Bank to facilitate and note take, representatives from the Ministry of Housing, Communities and Local Government (now the Department for Levelling Up, Housing and Communities) joined the discussion as observers. Monitoring the housing market is a large part of the Bank’s role as it oversees economic and financial system risk. This is because it sets the rate at which mortgage rates are based and ensures that lenders are able to meet potential losses when mortgage defaults occur.
Panellists agreed that the structural changes to the ways of working had both positive and negative impacts on the housing market. As people adopted homeworking or split-site working on a long-term basis, panellists felt this would help reinvigorate rural communities and address regional disparities in rent and house prices. Though some of this change was welcomed, those living in market towns and rural areas said the growing number of people leaving urban centres would have a detrimental impact on rent and house prices for local people. Concerns were raised about the expected surge in sales before the Stamp Duty holiday.footnote  This, it was believed, created distortions in the housing market by making housing even more unaffordable.
Panellists said that better government schemes were needed to support first-time buyers or home movers to meet their needs. Although schemes, such as Help to Buy and the government-backed 95% Mortgage Scheme, assisted first-time buyers and home movers to purchase property, it was felt that there was a lack of the right types of properties, at the right prices, in the right locations. Some panellists noted that these schemes may have also contributed to higher house prices. Others remarked that there was a lack of infrastructure to support new housing and residents. Some prospective first-time buyers said that they would have preferred the freedom to buy an older property as the current Help to Buy Scheme limits them to purchasing new-build properties. Older panellists who were downsizing said new-build homes were designed for young families. It was also felt that new housing should be energy efficient because of climate change and rising energy costs. Panellists concluded that the housing market did not reflect or meet buyers’ needs.
Panellists agreed that the biggest barrier to owning a home was raising a large deposit. Some asked why there was no way for those who have successfully rented for an extended period to have their payment record used as evidence that they could afford a mortgage. Panellists felt that lenders had tightened their criteria since the start of the pandemic and reduced the amount of mortgage products available. This created issues for those trying to get on the housing ladder and those looking to remortgage. Panellists said that while some homebuyers were able to draw on the support of the ‘Bank of Mum and Dad’, others did not have that option even though a monthly mortgage payment would be cheaper (in some cases) than paying monthly rent. Panellists explored options for first-time buyers. Panellists welcomed government schemes that cater for a wider range of buyers, such as divorcees, widows and those struggling to re-enter the housing market on a single salary not just first-time buyers.
Panellists noted that houses were not just seen as homes but increasingly as investments. This made things difficult for first-time buyers and home movers. Some policies targeting buy-to-let landlords had been effective in curbing this sort of demand which risked distorting the market. Panellists, however, agreed that housing continued to be a sound investment in economically volatile times and in a low interest rate environment. Renters on the panel said it was important that there was a good supply of rental accommodation and highlighted the important role buy-to-let plays in the property market. Some expressed concern about the impacts on rents of landlords selling their properties to cash in on higher house prices during the recent boom period. It was suggested that long-term rental agreements could help to provide renters with additional security and stability. Discussions on some panels, notably in South West England, turned to the undesirable effects second homes and short-term holiday lets were having on local communities driving up rents and house prices.
Panellists discussed the important role housing plays in mental wellbeing. There was universal agreement that homes should provide a sense of security and have a positive impact on wellbeing. The national lockdowns had created a new set of issues, especially for those in smaller properties or flats with limited outdoor space. Panellists discussed how adapting confined and/or ill-equipped housing to homeworking was taking a toll on people’s mental health. Those who worked from home were able to reassess where they wanted to work and what type of home they wanted in future. Conversely, others said that being indebted with unaffordable mortgages was also damaging to mental health. Panellists who had bought their home through the Share to Buy Scheme or who bought homes with combustible cladding described the mental distress these two issues created especially because they were eating into their much needed disposal incomes.
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The Bank hosted two dedicated panel discussions about climate change in January 2021 and May 2021 given the prominence of the topic across location-based events and the significant interest in this area. 124 panellists joined the two panels. Their purpose was to inform members about the Bank’s work on climate action and to hear about their experiences of climate change, what actions they were taking to combat it, and what they thought others – including the Bank – should be doing.
Panellists agreed that climate change could have an impact on their current way of life and that they were pushed to make changes to limit their impact on the environment (see Figure 1). For instance, panellists had made small adjustments to their lives which, collectively, they believed could combat climate change. Some panellists described how they either tried to reduce their commute by living closer to work or were changing the ways they commuted to work (on foot, by bike or hybrid or electric cars). Others had installed insulation, heat pumps, and solar panels to be more energy efficient and save money. Discussions about energy efficiency upgrades to homes provoked discussions around the need for the construction industry, enforced by Government regulation, to build more eco-friendly homes.
Figure 1: Word cloud of how panellists see climate change affecting their lifestyles (a)
Question: How do you see climate change affecting you?
Panellists said that because of climate change, they were more discerning about organisations they chose to work for and where they invested their money. One panellist, who works at an investment bank, said that his employer offered him the option of a ‘green pension’ that focused its investments in sustainable sectors. Others said that their employers had set up climate change staff committees to provide guidance on how to be more environmentally conscious. Panellists said they would actively consider a potential employer’s environmental record before choosing to work for them.
Panellists felt that their actions to alleviate climate change could only go so far. For instance, many said behavioural changes to consumption and commuting were limited by the costs of green alternatives with one panellist saying that a ‘green premium’ was attached to making environmentally conscious decisions. Others said that while it was good people were becoming more aware of their lifestyle’s contribution to climate change, it was for big business and the financial sector to drive forward the green agenda: their activities represented a disproportionately large contribution to climate change. Panellists in rural areas drew attention to the unequal provision of green technology infrastructure across UK regions and nations citing a reliance on oil for heating systems and lack of the requisite infrastructure for electric cars.
Panellists went on to discuss the need for a new economic model and the conflict between growth, consumption and climate change. Many felt that people needed to consume less and were interested to see if previous pre-pandemic spending and travelling habits would return. The general feeling was that panellists across the dedicated climate change and location-based sessions did not want to lose environmental gains made during the pandemic. Lockdowns were cited as beneficial in the short term: panellists had time to go out for walks, discovered local green spaces and noticed improvements in air quality. These attuned panellists increasingly to climate issues. Yet some panellists worried about awareness dipping and old habits returning. The key message from panellists was that for action on climate change to gain more traction, green choices needed to be the easiest and competitively priced option. Indeed, 50% of panellists who joined the climate change sessions believed that lack of incentives for households and businesses to change and the high cost of green options was a barrier to achieving net zero targets.footnote 
Panellists also considered the role businesses could play in supporting climate action. One of the key themes that emerged was the lack of belief that change would come without appropriate incentive, regulation and enforcement. Moreover, the UK Government would need to drive this forward and provide the required international leadership. Participants felt that responsibility laid with large companies whose activities contributed the most to climate change. Many felt that businesses should rethink priorities and shift from short-term profits to longer-term thinking. Panellists said that it was in the interest of businesses to support efforts to combat climate change because in the long term it saved more money from the economically harmful and disruptive effects of climate change. Panellists condemned the trend of ‘greenwashing’ where companies share misleading information about their activities’ environmental credentials.
Panellists shared a variety of views of how to tackle climate change (see Figure 2 for ways the financial sector specifically could support climate action). The first of these ideas was a carbon tax on consumers that was explicitly geared at reducing carbon emissions created by energy, transport, food and imports consumption. Second, robust yet simple regulation that set consistent rules in which financial institutions must operate. Third, green impact assessments for products and services (ie a traffic light scheme). This would empower consumers, giving them the information they needed to make more informed choices about what they were consuming and from where. Fourth, the creation of a green investor accreditation scheme which scores organisations based on their environmental record for the benefit of potential investors. Fifth, allow lenders to incentivise green borrowing making it cheaper to borrow for environmental projects and more expensive for environmentally destructive activities. Last, panellists suggested recasting the language around climate change. For instance, rather than describing people as ‘consumers’ they should be called ‘responsible citizens’ and businesses as ‘stewards’ with a commitment to sustainability and environmentally friendly practices.
Figure 2: Word cloud of panellists’ recommendations on how the financial sector can help to tackle climate change (a)
Questions: How can the financial sector support climate action?
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This report has synthesised a variety of panellists’ views and their first-hand experiences of the economy. Many of the diverse themes covered here chime with issues we deal with as part of our work in local communities. It is hoped that the Bank and policymakers at large use the panellists’ lived experiences to better inform the economic policies they develop to enhance the lives of UK households and businesses.
The popularity of virtual Citizens’ Panels and their convenience has had several advantages for both the panellists and the Bank. Virtual Citizens’ Panels make these events accessible to a wider range of people in a way that in-person events could not. The Bank is now exploring a hybrid model for the Citizens’ Panel programme with both virtual and in-person events in the future.
We are pleased to learn that the Bank is also proactively seeking to partner with several external organisations to expand the diversity of the Citizens’ Panel membership base to make it as representative as possible in demographic and geographical terms. This is a positive development and will enrich the quality of the panel discussions.
A welcome development is the creation of the Citizens’ Panel members’ online site, The Economy Hub (sign up for more information). This innovation will allow members to share their views about the economy, engage with other members, and learn more about how the Bank supports the economy through online surveys, discussions and content. We are excited to see what dividends this new platform pays for the Citizens’ Panel community.
Last, one of the things that has stood out for us in this set of panel discussions was the remarkable resilience shown by people and businesses across the UK during a major public health crisis with far-reaching economic and social consequences. Panellists’ everyday experiences have been humbling and enlightening in equal measure. Constructive dialogue between the public and the Bank must continue as the UK economy moves beyond the worse of the pandemic to pre-empt and respond to future economic challenges as these emerge.
The Bank organised one themed Citizens’ Panel on housing, two on the labour market, and two on climate change between August 2020 and July 2021.
Structural economic changes refer to long-term or permanent changes to the nature of the economy.
Furlough refers to UK employees who had part of their salaries paid by the government-backed Coronavirus Job Retention Scheme as they were unable to work because of lockdown restrictions.
Zero-hours contracts are employment contracts with no obligation on employers for offering a fixed number of hours to employees. Employers are, however, responsible for employees’ health and safety.
440 Citizens’ Panel members responded to a Bank online survey about future ways of engagement in August 2021.
Female panellists represented 42% of all panellists compared to the 51% that make up the UK population. Ethnic minority panellists represented 21% of panellists compared to 13% of the UK population. Under 25 year-old participation was 6% compared to the 14% that make up the UK population. The Bank set up the Youth Forum to address this underrepresentation. People earning less than £20,000 accounted for 24% of panellists versus 39% of the population. The Bank continues to broaden the demographic and geographical diversity of the Citizens’ Panels membership base that currently stands at around 3,500 members.
The Government created job support schemes for workers and businesses impacted by the pandemic. This enabled businesses to put some employees on furlough during the national lockdowns until the economy opened up fully, protecting jobs and the survival of businesses. The Self-Employment Income Support Scheme targeted the self-employed and freelancers. The Government’s Recovery Loan Scheme offered loans (up to £10 million per business) to support businesses of any size to recover from the pandemic and Brexit transition.
Economic ‘scarring’ refers to medium to long-term economic damage created by an economic shock.
At the end of July 2021, public sector net debt was £2.2 trillion or around 98.8% of UK GDP, the highest ratio since the 99.5% recorded in March 1962 (Public sector finances, UK: July 2021, Office for National Statistics).
CPI measures the average change in prices over time that consumers pay for a basket of goods and services.
Fixed-income assets typically include investments like government and corporate bonds. These offer a risk-averse and steady stream of income in comparison to shares.
Stamp Duty is a tax paid by the buyer of property or land in England and Northern Ireland over a certain threshold. The UK Government’s Stamp Duty holiday introduced an exemption from the tax on properties valued up to £500,000 between 8 July 2020 and 30 June 2021.
Universal Credit is a payment to support with living costs made to those under the UK state pension age and are either on low incomes or unemployed.
The Universal Basic Income is a minimum income guaranteed by Government to ensure citizens can cover basic costs and establish financial stability. This policy has been trialled in several countries.
The Stamp Duty holiday, that was originally due to expire on 31 March 2021, was extended to 30 June 2021. A lower rate of Stamp Duty was paid on qualifying property and land purchased between 1 July 2021 to 30 September 2021, after which the standard rates of Stamp Duty applied.
The Climate Change Act, as amended in 2019, commits the UK Government to achieving net zero by 2050. This is where the amount of greenhouse gases emitted into the environment is offset by the removal of greenhouse gases from the atmosphere. This is achieved by reducing existing emissions and actively removing greenhouse gases from the atmosphere.