Over 11.6 million adults to maintain extra savings built up during Covid-19

More than 11.6 million adults will maintain the extra savings they built up during the Covid-19 crisis as a new mood of caution hits home, new research from The Openwork Partnership shows.

More than half (51%) have put the money into existing instant access accounts and cash ISAs and The Openwork Partnership is urging them to look beyond cash accounts paying low rates to investment accounts offering potentially higher returns.

Its research shows around two out of five (42%) who have saved more during the pandemic plan to carry on with just one in 12 (8%) planning to spend all the extra cash.

Nearly a quarter (24%) of people say they are cautious with money as a result of the pandemic. Around one in five (20%) say the crisis has convinced them to keep their finances under control and 18% say it has convinced them to save regularly.

Government data shows the household savings ratio – how much households save as a proportion of income – hit an all-time high of 23.4% in the second quarter of 2020 before dropping back to 11.7% in the second quarter of this year, still the highest since 1996

The Openwork Partnership research found more than half (55%) of adults saved more during the crisis with average extra monthly savings hitting nearly £220. Men managed an average £263 and women £177.

Most of the extra money went into cash savings but more than one in 10 (11%) made additional pension contributions or started contributing. Around 17% put money into existing share ISAs or opened new ones while 7% opened up new unit trusts or increased contributions to existing ones.

Mike Morrow, chief commercial officer at The Openwork Partnership, said: “The Covid-19 pandemic forced many people to save more as quite simply they couldn’t spend during lockdown restrictions and that has continued for some during most of this year.

“It is encouraging that millions plan to keep up with the extra savings now that the economy is returning to normal, and there are more opportunities and temptations to spend after a tough 18 months.

“Financial advisers can help them make the most of their money and work out a financial plan as piling extra money into cash savings is not necessarily the best approach when interest rates are at historic lows.”

The table below shows the picture across the country with people in Wales the most likely to keep on savings and also the least likely to spend it all.

Northern Ireland49%5%
North East45%11%
North West42%8%
Yorkshire & The Humber40%7%
South West38%4%
South East37%7%
East Midlands 37%5%
East of England37% 6%
West Midlands33% 6%