UK markets close in 6 hours 53 minutes
  • FTSE 100

    6,888.36
    -0.76 (-0.01%)
     
  • FTSE 250

    22,196.47
    +42.92 (+0.19%)
     
  • AIM

    1,238.03
    +3.34 (+0.27%)
     
  • GBP/EUR

    1.1557
    +0.0026 (+0.23%)
     
  • GBP/USD

    1.3752
    +0.0009 (+0.07%)
     
  • BTC-GBP

    45,546.51
    +852.70 (+1.91%)
     
  • CMC Crypto 200

    1,325.44
    +30.86 (+2.38%)
     
  • S&P 500

    4,127.99
    -0.81 (-0.02%)
     
  • DOW

    33,745.40
    -55.20 (-0.16%)
     
  • CRUDE OIL

    59.84
    +0.14 (+0.23%)
     
  • GOLD FUTURES

    1,728.00
    -4.70 (-0.27%)
     
  • NIKKEI 225

    29,751.61
    +212.88 (+0.72%)
     
  • HANG SENG

    28,497.25
    +43.97 (+0.15%)
     
  • DAX

    15,253.54
    +38.54 (+0.25%)
     
  • CAC 40

    6,184.56
    +22.88 (+0.37%)
     

COVID-19 shutdowns created 6 million 'accidental savers' in UK

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
Lucy Harley-McKeown
·3-min read
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
Permanent TSB cash machines seen in Dublin during Level 5 Covid-19 lockdown. 
On Saturday, 30 January, 2021, in Dublin, Ireland. (Photo by Artur Widak/NurPhoto via Getty Images)
According to a report by financial consultants at LCP, despite the widespread havoc on businesses, many have seen their financial situation improve — another data point which highlights rising inequality in the UK. Photo: Artur Widak/NurPhoto via Getty Images

UK coronavirus lockdowns have created around 6 million "accidental savers" throughout 2020, as outgoings dwindled due to widespread COVID-19 lockdowns.

According to a report by financial consultants at LCP, despite the widespread havoc on businesses, many have seen their financial situation improve — another data point which highlights rising inequality in the UK.

Savings can be put down to lower travel costs for those working from home, fewer holidays and halt to eating out. The cut to commuter expenses in the long-term as businesses make decisions on office use and space could further improve their situation, the report said.

Those aged over 55 had been most likely to save as a result of holidays being cancelled or not booked, and older people were also most likely to have cut back on eating out, the report said.

The evaluation comes as millions in the UK face debt and destitution, as businesses fight to survive ahead of the economy reopening via the government's coronavirus "roadmap."

Millions are also facing pressure from a squeeze on food and energy bills, as well as other costs related to child care and the hit to their income due to furlough.

READ MORE: First-time buyers in UK to get help with new mortgage loans

Figures from the Office for National Statistics recently showed that more than 9 million people have had to borrow more than they usually would by the end of 2020.

Heidi Allan of LCP said that the UK's super-fortunate "accidental savers" now have a unique and expected opportunity to improve their personal financial situation.

She said: "This is an opportunity for them to put their personal finances on a firmer footing by reducing debt and increasing saving.

"Employers will have a key part to play in ensuring that workers take advantage of this opportunity and do not simply allow these increased balances to sit in current accounts and gradually drift away."

READ MORE: £5bn UK high street COVID recovery fund in store in budget

Recent research also showed that COVID-19 savings could spill over into 2021. UK savers are set to put away a total of £164bn ($231bn) worth of savings and investments this year in a sign that coronavirus has changed how we save as a nation.

Despite the financial challenges many families faced, household savings still reached record levels last year, with coronavirus curbing many people’s spending and allowing Brits to accumulate £2,674 each in cash savings alone, on average, since the start of the crisis.

Analysis by mutual Scottish Friendly and the Centre for Economics and Business Research (CEBR) suggests Brits will continue to save at levels well above the historical average, although there will remain a high degree of variation in households’ capacity to save.

Watch: Should I pay off debt or save money during the pandemic?