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One in five wealthier households ‘saved more than £10,000 over the past year’

Vicky Shaw, PA Personal Finance Correspondent
·2-min read

One in five wealthier households managed to save more than £10,000 over the past year due to coronavirus restrictions curbing spending, a survey has found.

Across the population generally, one in 12 (8%) of people said their household has managed to save more than £10,000 as a result of reduced spending during coronavirus restrictions.

This proportion increased to around one in five (21%) of those with assets of between £100,000 and £500,000 excluding property.

Nearly three-quarters (72%) of people said they had been able to make some savings on outgoings, such as reduced costs from commuting, childcare or eating out, the report from LV= said.

On average, these reduced outgoings had saved people nearly £5,500 over the past 12 months, although among the more affluent households the average saving was around £3,000 higher, at just over £8,500.

While some have managed to boost their bank balances, many people have also had income hits during the pandemic from pay cuts, furloughing and unemployment.

Nearly eight in 10 (79%) parents with young children aged under 11 said their household had saved money, with reduced childcare costs helping to produce savings of just over £8,000 typically.

More affluent people with assets of between £100,000 and £500,000 excluding property were twice as likely as the general population to have put their savings into long-term investments (16% versus 8%).

The LV= wealth and wellbeing monitor, a quarterly survey of 4,000 people across the UK also found that the more affluent were more likely to have put their additional savings into a pension (8% versus 5% overall).

The findings were released after shops, hairdressers and pub beer gardens in England reopened on Monday.

Clive Bolton, managing director of savings and retirement at LV= said: “LV=’s research indicates that much of the accumulated saving has been concentrated among relatively well-off households.

“The UK has been divided into two groups: those who are struggling on reduced incomes, and those whose income has remained stable and whose costs have been greatly reduced.

“The past 12 months has been tough for many, especially for those who have been put on furlough, made redundant or who are self-employed.

“However, those people who have remained in work have been able to save large sums as large expenses such as holidays, commuting costs, childcare and entertainment have vanished.”

The survey took place in March.