Savers put away 29% less as lockdown eased

Savings habit slump: Britons continued to stash money away as lockdown eased – but the average amount dipped by 29%

  • People are still saving after lockdown restrictions have eased, new data shows 
  • However, the average amount being saved is 29% less than in March 
  • More people are found to be spending on eating out and shopping  

The average amount people saved since lockdown restrictions lifted on 17 May has dipped by nearly 29 per cent, when compared to the level of the last two weeks of March, new research has revealed.

In a sign that Britain’s lockdown savings habit may tail off as opportunities to get out and spend present themselves, people are still sticking money aside but less of it, according to figures from finance app Yolt.

Nonetheless, it said its users savings pots were growing – rising by an average of 17 per cent over the period.  

People are saving less since lockdown restrictions eased with many spending on eating out

Unsurprisingly, with more people able to make the most of a bit of newly-returned freedom, its data showed spending also increased in several sectors, with the highest change in shopping and eating out. 

This includes a 9 per cent uptick in the average amount users spent on eating out, rising as indoor dining resumed.

Meanwhile, Yolt customers have spent 7 per cent less on groceries since restrictions lifted in May, when compared to during lockdown in March. 

Yolt is an app that enables users to view their accounts, credit cards, pensions and investments in one place, and has 1.6million registered users across all markets – it drew its data from a sample of 30,000 users in the UK. 

Where are people spending? 

Yolt found there was a 6 per cent increase on the amount splashed on shopping in the last two weeks of May compared to the same period in March, after non-essential retail re-opened on 12 April.

The average number of transactions made also increased by 1 per cent.  

Whilst this may not seem incredibly high, the data includes both online and in-store shopping, with many having spent much more online during the lockdown period anyway.   

Not only was there an 9 per cent increase in the average amount people spent on eating out, but overall transactions were up 14 per cent.  

Separate research from Lloyds Banking Group showed spending in pubs and restaurants, including takeaways, increased 36 per cent between Monday and Wednesday in the week of 17 May compared to the same period the week before. 

Spend: Unsurprisingly, there has been a rise in shopping since restrictions were lifted in April

Spend: Unsurprisingly, there has been a rise in shopping since restrictions were lifted in April

Lloyds added that spending at supermarkets fell back 5 per cent in the week from May 17 compared to the week before.

Its customers have also spent 10 per cent less on groceries since the restrictions further lifted on the 17 May, when compared to the same period during lockdown in March.

This could indicate people are beginning to do less shopping for home given the easing of restrictions and the option to eat out.

This is backed up by the 4 per cent decrease in Yolt users’ spending on takeaways since the opening of hospitality venues.

Interestingly, the amount people spent on transport decreased by 18 per cent compared to at the end of March, but the number of transactions increased by 17 per cent.

Yolt said it looks as though this showed people starting to travel more, but with the average spend down it could point to shorter, more local trips – rather than bigger less frequent but more expensive journeys over larger distances.

Pauline van Brakel, chief product officer at Yolt, said: ‘The past year of lockdown restrictions has undoubtedly had an impact on our food shopping, dining and savings habits, and as we move further out of lockdown it is likely we will again see a shift.

‘The financial impact of the pandemic has been far reaching, and effected some people more negatively than others.

‘As lockdown restrictions have gradually eased and continue to ease, it has never been more important for people to be smart with their money, and to strive to find new ways of balancing spending and saving.’ 

Consumers are encouraged to budget to help them spend less and save more in the future

Consumers are encouraged to budget to help them spend less and save more in the future

Tips to spend less and save more 

Tips to continue to spend less and save more now that restrictions are starting to ease.

1) Review expenses: Simple steps like reviewing your regular expenses such as energy bills, grocery shopping and subscription services can be a good way to highlight areas where you could cut back on spending. 

Taking stock of your outgoings in this way may even uncover direct debits you have forgotten about – which can also help to free up funds.

2) Use price comparison sites: You may even be able to save on your ‘fixed’ costs such as energy, broadband and mobile deals.

Research alternative providers and deals by using price comparison sites and you could save hundreds of pounds. This is Money’s carefully chosen partners can help with this, see if you can save on:

> Broadband and TV

> Energy bills 

> Your mortgage

> Car and home insurance 

3) Spend smart: Shop around for the best deals and keep an eye out for money saving offers wherever possible. 

4) Keep your savings and spending money separate from each other: This will ensure you don’t unintentionally dip into your savings and also allows you to see the progress you are making in reaching your savings goals.

> Check the best savings rates 

5) Set a finite budget and stick to it: Track your spending to make sure that you don’t exceed this limit. If you have more than one account, it can be easy to lose track of where your money is, which can lead to you feeling overwhelmed. 

Setting a realistic budget and tracking spending can be massively useful in helping you plan and outline budgets that work for you, helping you to avoid relying on credit where possible and allowing you to feel more on top of your money.