Pandemic triggers shift to saving as Brits look to batten down the hatches

Research published today by insurer Zurich suggests the pandemic is making people re-think how they spend and manage their money with more than half (51%) now looking to prioritise saving for an unexpected event or loss of income.

A third (32%) are putting their money where their mouths are and setting aside more as we face more uncertainty. This reflects Bank of England estimates that more than £200bn of savings have been built up during lockdown, but only 10% of these are expected to be spent over the next three years.*

Zurich’s findings show that while just under half (46%) of households are spending less generally on a day-to-day basis, the pandemic is clearly making people think more about their spending and financial priorities. Nearly two thirds (65%) said they are now very mindful about their money with 38% giving more consideration to financial planning, and savings and investments (for 39%).

When asked what they would do with an unexpected £2k windfall, 40% said they’d save it compared to just over a quarter (26%) who said they’d spend it right away.

Unsurprisingly, people’s savings are being offset in part by increases in grocery and household bills (for 37% and 36% respectively). And with more time at home for many, it seems we’re battening down the hatches and spending more on premium food and take-aways, while 39% are looking to invest in home improvements and DIY as we look to enhance our space.

The good news for the advice sector is that nearly one in five (19%) are thinking more about seeking professional financial advice, a quarter of people are giving more thought to wills and inheritance planning and nearly one in five are thinking about protection products such as critical illness cover.

Commenting on the findings, Louise Colley, Zurich’s Director of Protection said: “The past 15 months really have brought into sharp focus the importance of our livelihoods and finances with many concerned about their health and financial security.

“But despite these tough times, it’s reassuring to see people taking stock and thinking positively about how they can bolster their situations.; It would be hugely positively step to see more consumers seek professional financial advice so that they can put in place all of the support they need to give them peace of mind should the worst happen.”

*204 respondents to Zurich’s research panel made up of 88% target customers 12% customers May 2021