Locked wallets: COVID ‘savings’ will not be splurged

THE eventual end of COVID restrictions will not lead to a spending splurge.

Seven out of 10 people will hang on to any cash they may have saved during the pandemic, according to a global survey.

When asked the question: “Are you likely to spend the majority of the extra money you have managed to save over the last 12 months?” 72% responded ‘no’, 16% said ‘yes’ and 12% did not know.

The 450-plus respondents were clients of the deVere group who currently reside in North America, the UK, Asia, Africa, the Middle East, East Asia, Australasia and Latin America.

Britons have amassed around £100 billion of ‘excess’ savings during the lockdowns, according to the Bank of England.

The household saving ratio soared to an all-time high of 29.1% in the second quarter of last year. It’s a trend that is mirrored in most major economies around the world including Spain.

Nigel Green, deVere Group CEO and founder, said: “The pandemic has been a time of great financial worry and insecurity for many households.

“But for others, especially those in developed economies who have been able to continue working from home throughout, they have accumulated more savings than they usually would due to the lack of services, travel and leisure activities to spend their incomes on.”

For example, Britons have amassed around £100 billion of excess savings during the lockdowns, according to the Bank of England. The household saving ratio soared to an all-time high of 29.1% in the second quarter of last year. It’s a trend that is mirrored in most major economies around the world.”

The deVere CEO continued: “The historic levels of excess savings are fuelling economic rebound forecasts, and with them inflation fears, as there’s expectations that families will splurge the extra money built-up during the pandemic.

“However, our poll suggests that most people are not planning to spend much of the additional cash.

“Naturally, we should expect an increase in spending as economies re-open, but the majority of those surveyed appear to welcome having an extra financial buffer.

“The pandemic has got people thinking about and valuing more than ever what really matters to them. For most of us, this includes ensuring that we and our loved ones are financially secure to have the opportunities and lifestyles that we desire.”

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