A third of people have bolstered their savings during the coronavirus crisis – and many are reluctant to spend much of the extra money once restrictions lift
A year since the first national lockdown began, some 32% of Britons have managed to grow their savings. This group could be important in the coming months according to the Bank of England’s chief economist, Andy Haldane, who has said excess savings and ‘huge pent-up demand’ could help the economy bounce back.
A further fifth of Britons have, however, seen their reserves dwindle during the pandemic, while another third (33%) say they’ve stayed the same. Some 11% had no savings prior to the pandemic and still don’t.
People whose savings have increased have gained a median amount of £4,500 – amounting to around £375 a month. Those whose stash has decreased have lost around £3,000 – the equivalent to withdrawing £250 from their savings every month.
People in social grade ABC1, who tend to do professional work and who are more likely to be able to work from home, have been able to save the most. Among this group, two fifths (38%) have increased their nest egg.
This is much higher than among C2DEs, who tend to do manual labour, of whom under a quarter (23%) have managed to save in the last year. While only 6% of ABC1s have no savings at all, this is true of 17% of C2DEs.
ABC1 savers have put aside a median amount of £5,000 since March last year, while C2DE savers saved at half the rate, amassing £2,500.
How keen are people to spend once the economy reopens?
Any hope that pandemic savers will go out and blow it all this summer is optimistic, although most plan to spend a portion. A fifth (18%) say they’ll spend half or more of what they’ve put aside in the past year if things are back to normal this summer. Some 51% expect to spend “some, but less than half”, and a fifth (21%) have no plans to spend any of it.
Among all Britons, younger people are the most likely to spend what they have saved during the pandemic. A quarter 18- to 24-year-olds (25%) plan on using half or more of their savings in the last year, which is the highest of any group.
How much do Britons plan to save once life returns to normal?
Another important aspect is how keen people are to save once coronavirus restrictions are lifted this summer.
Britons are split on whether they will save more (21%) or less (18%) compared with during the pandemic. A slightly greater number (26%) hope to save more than before coronavirus, while only 9% expect to put less money aside.
Among people whose savings have increased since March last year, a fifth (19%) hope to save even more in normal times, while 36% believe they won’t be able to keep going at the same rate. But many (44%) still hope to be more prudent than before the pandemic, while only 7% believe they will save less than previously.
A third of those whose reserves have suffered in the past year (34%) are keen to save more once the restrictions are gone, while 16% say they will save less. Their verdict on how it will compare with before coronavirus is mixed, with under a quarter (23%) planning to put more aside while a fifth (19%) say less.