Research from savings and retirement specialist LV= highlights how millions of people have become forced savers during the coronavirus pandemic.
The LV= Wealth and Wellbeing Monitor* – a quarterly survey 4,000+ UK consumers – reveals that reduced spending on commuting, childcare, eating out and going on holiday has enabled 72% (38m) people to say their household has saved money as a consequence of the pandemic.
How people have been saving**
- Nearly three-quarters (72%) of UK adults surveyed say their household has saved money as a result of reduced spending due to covid restrictions (E.g. reduced commuting costs, childcare costs, eating out costs, etc.). Those that did save saved on average nearly £5,500 during the past 12 months.
- 8% (4.4m) say their household saved over £10,000 as a result of reduced spending due to covid restrictions.
- 79% of parents with young children say their household has saved money, and those that saved money saved on average over £8,000 because of reduced childcare costs
- One in five (1.4m) mass affluent people – those with assets of between £100,000 and £500,000 excluding property – say their household has saved over £10,000.
| In the last 12 months, how much money has your household saved as a result of reduced spending due to covid? (E.g. reduced commuting costs, childcare costs, eating out costs etc.) | |||
| UK Adults | Parent of child under 11 | Mass Affluent | |
| I’ve not been able to save, but not in more debt | 24% | 16% | 15% |
| I’m/we’re in more debt than before | 4% | 4% | 1% |
| £1-£499 | 9% | 9% | 4% |
| £500-£999 | 8% | 8% | 7% |
| £1,000-£4,999 | 16% | 22% | 22% |
| £5,000-£9,999 | 7% | 12% | 11% |
| £10,000+ | 8% | 20% | 21% |
| I have saved money but I’m not sure how much | 24% | 8% | 19% |
| NET: Saved money | 72% | 79% | 84% |
| Average (for those that saved something) | £5,498 | £8,078 | £8,580 |
Savings & Cash ISAs are most popular:
UK consumers are split on what they are doing with these savings: 28% (10.6m) have put it in savings or cash ISAs. One in five (8.2m) are spending their savings on a holiday. 19% (7.4m) are using it for home improvements.
Longer term savings are proving less popular. Only 5% are saving extra into a pension and only 8% are saving into an investment or stocks & shares ISA.
Mass affluent people – those with assets of between £100,000 and £500,000 excluding property – are twice as likely as the general population to have put their savings into long-term investments (16% vs 8%), invested for their children or grandchildren (11% vs 6%) or saved into a pension (8% vs 5% overall).
Clive Bolton, Managing Director of Savings and Retirement at LV=, said:
“LV=’s research indicates that much of the accumulated saving has been concentrated among relatively well-off households. The UK has been divided into two groups: those who are struggling on reduced incomes, and those whose income has remained stable and whose costs have been greatly reduced.
“The past 12 months has been tough for many, especially for those who have been put on furlough, made redundant or who are self-employed. However, those people who have remained in work have been able to save large sums as large expenses such as holidays, commuting costs, childcare and entertainment have vanished.
“LV=’s next wave of research will give an indication about how the end of lockdown will change spending and saving patterns.”