Better-off Brits expecting to save as well as splurge their additional money

COVID impacts on Savings

Michael Worledge - Head of Research, Financial Services

In March 2021 we reached out to the UK public to see how the global pandemic was impacting their finances. What we discovered was a clear divide between those that have experienced financial benefits as a result of the pandemic and those that have not, and it is those of working age that are more likely to be the financial losers.

Those with more money are far more likely to be over 66, where 46% report having more money, compared with 27% of 18-65 year old aged population.

Those with extra money are largely planning to hold onto it – 50% ‘for a rainy day’ and for 45% will put into a savings account.

  • 40% want to use it on a holiday. Other popular plans are home improvements (32%), spending on going out (31%)

Different age groups have different priorities for surplus money: more retirees will put it towards holidays and under 50s towards property or mortgage overpayment.

Looking ahead people expect to increase the amount they have in savings over the next year too: Over a third (37%) of people with a savings account expect to increase the amount of money they have there, compared with 16% expecting to decrease.

This is especially the case for people who feel they have more money than a year ago: 66% of them are going to increase the amount in savings.

As well as savings, this ongoing change in people’s views about how much money they have is having a knock-on effect on their views about their ability to meeting outgoings such as bills. For example, when we asked people to what extent that they feel keeping up with bill payments and credit commitments is a burden, only 4% who consider they have more money now considered it a burden. This differs significantly to those who consider they have less money with 31% of that group saying they see this aspect as a burden.

Pensions is another area where people are expecting the amount of money to increase with 29% of people expecting the amount they have invested there increasing. However COVID is having an effect on those approaching retirement with one in ten 50 to 65 year olds saying they are intending on retiring later as a result of the pandemic.

There is a clear divide between those that have experienced financial benefits as a result of the pandemic and those that have not, and it is those of working age that are more likely to be the financial losers. It is positive for the industry that people plan to increase the amount held in savings and we should expect strong demand for attractive savings and investment propositions, even in this low interest rate environment – Michael Worledge, Financial Services Sector Head, Harris Interactive

These results are based on the responses of 994 UK adults (18+) surveyed online between 18th and 29th February 2021 using Toluna Start.

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