Three quarters (75%) of UK households have managed to save some money during the lockdown period according to a recent survey conducted by Compare the Market.
On average, households say they have saved around £300 on day-to-day expenses, with the primary drivers including not going to restaurants (65%), not going to the cinema (51%), driving (51%) or commuting less (30%), and not paying membership fees, for example for gym memberships or TV sports packages (21%).
A similar proportion (76%) of families with children at home have managed to save money during lockdown, with a noticeably higher average saving on day-to-day costs of £414.
Whilst these savings may help in the short-term, they are mainly temporary, and the research suggests that household finances could be badly impacted after the lockdown lifts.
Nearly six in ten (59%) families with children at home think that the economic impact of the pandemic will have a long-term effect on their household finances (compared with 47% of families with no children living in the house).
A quarter (25%) of households with children at home have had to dip into savings, 11% have borrowed from family and friends and 10% have taken on additional bank debt. Almost a third (31%) say they will have to cut back or make sacrifices for 6-12 months after the lockdown ends.
Families with children at home are worried that the easing of lockdown could increase their costs, with a quarter (25%) of this group admitting that the reopening of schools and nurseries will put additional financial pressure on their finances.
Anna McEntee, Product Director at comparethemarket.com, said: “We are starting to see green shoots of financial confidence from UK households, but the bad news still outweighs the good news – the savings households have managed to make during lockdown may offer some temporary respite however, when lockdown lifts, the cost of living will go back to previous levels, rainy day funds have been raided and borrowing will need to be repaid.
“People are still very worried about the long term hit their finances will take and this anxiety is especially pronounced among those with children at home and extra people to care for.”
For more information and to read the full report, visit Compare The Market.
