COVID-19 lockdown boosts household financial confidence and savings

·2-min read
Over a third of Brits have less than £100 in savings. (Nick Fewings/Unsplash)
Brits are increasingly determined to save money, and less inclined to make major purchases. Photo: Nick Fewings/Unsplash

Brits’ determination to save money during the COVID-19 lockdown may have boosted their confidence in their future finances, research suggests.

People have become slightly less downbeat about their future finance prospects in recent weeks, the Consumer Confidence Index by market researchers Growth from Knowledge (GfK), based on a survey of 2,000 Brits, found.

Brits’ expectations for the financial position of their households over the next 12 months increased from a score of -3 in the previous index to zero, published on 3 July, to zero in the latest research.

However, expectations for the general economy remain firmly stuck in negative territory at -41 — just a slight improvement from a score of -42 in the previous report.

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The research also found that people’s attitudes towards making major purchases have “deteriorated.”

When asked, considering the UK economy, if they think now is the right time to make major purchases, such as furniture or electrical goods, the score on this measure was -26 — down slightly from from -25 earlier in the month.

This belief is accompanied by a growing determination to put savings away. When Brits were asked if they think now is a good time to save, the score was 21 — up eight points from 13 previously.

The overall index score remained negative at -27, unchanged from the previous score.

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“There’s been little to boost the public’s mood as the cost of the pandemic to the UK’s economy is becoming apparent,” said Joe Staton, GfK’s client strategy director.

“Many people have been savvy and saved money during lockdown… That could explain the one bright spark on the horizon — the three-point uptick in consumer expectations for the financial position of their households in the next 12 months.

“The way we perceive our ‘future wallets’ is key as it’s the one area over which we have day-to-day control and is a good indicator of our personal financial outlook for the year to come.”