A nuanced outlook for post-lockdown spending plans
A new survey from the Building Societies Association has revealed a nuanced outlook for post-lockdown spending plans.
- Almost one in three have seen savings increase during pandemic
- Where you live may impact the extra savings you’re likely to have
- Over a third of people expecting to save all their increased savings
As we get closer to the re-opening of non-essential shops on our high street, a survey from the Building Societies Association reveals marked differences in expected spending habits.
Almost a third of people (31%) have seen their savings pots grow during the Covid-19 pandemic, but when asked if they’re likely to spend or save their savings there’s no common plan. Almost half (47%) of those whose savings increased during the pandemic said they were planning to spend some of it, whilst 37% saying they don’t expect to spend any of it.
Only one in 20 (6%) are planning a spending splurge, saying they will spend all their extra savings.
Looking at what people are planning to spend their increased savings on once restrictions are lifted, unsurprisingly over half (52%) said holidays with 48% planning to invest in home improvements.
Digging deeper into the data shows, unsurprisingly, that the overall average figures conceal a big difference between those earning £30k or more a year and those earning less than £30k a year.
Almost half of the people (47%) in the higher earning bracket have seen their savings pots grow, compared to around one in three (29%) of those earning less than £30k a year.
Almost a quarter (21%) of people have seen their savings decline during the Covid-19 pandemic, with those in the lower income group hardest hit. A quarter of people earning less than £30k a year saw their savings pots reduce, with just 17% of those earning above that amount seeing a decline in their savings.
Looking at the expected spending of people who saw their savings increase over the pandemic by region gives some surprising results (see chart 1 below).
People in Yorkshire & Humberside are the most likely to spend some of their additional savings, with over half of them (56%) expecting to do so. In contrast, just 38% of people in the West Midlands are planning to spend some of their additional savings.
People in London are the most likely to save all their increased savings pot with 43% planning to do so, with less than one in three (30%) of those in Yorkshire & Humberside planning to hold onto all their extra savings.
Commenting on the findings, Brian Morris, Head of Savings Policy at the BSA said:
“We know the impact of the Covid-19 pandemic has not been uniform and this survey shines a light on some of the differences in its effect on people’s finances and future plans. Almost a third of people have managed to grow their savings, but just under a quarter have seen their savings pot reduce during this time and may be struggling financially.
“It’s understandable that some of those who have seen their savings pots grow during the last 12 months are planning to spend as the Covid-19 restrictions ease.
“Having some savings available for unexpected costs or income shocks is advisable for everyone. It’s therefore encouraging that the majority of people appear to recognise this and are planning to hold on to some of their increased savings.
“Hopefully the positive savings habits that some people have developed through the pandemic will continue long after the lockdowns, building financial resilience to help people withstand a financial shock without going into further debt.”