With shops, restaurants, bars and pubs closed during lockdown, a large number of people used this as an opportunity to save money and substantially decrease their spending.
In some cases, these savings have been substantial, with average households holding onto £2,879 during the 13-week lockdown. In fact, according to figures released by the Bank of England, the UK population saved £16.2bn in April, a large increase from the average £5bn a month saved previously.
Reduced costs = bigger savings
It’s not difficult to understand how these figures have arisen: commuting costs were cut and holidays postponed. Not only this, but day-to-day expenses such as a coffee on the way to work or a pint afterwards were slashed considerably with the hospitality sector closed and more people working from home.
For some, however, lower spending has also been offset by reductions to income. Businesses felt the brunt of the financial impact from the lockdown, and so people across the country received salary cuts and redundancies. However, for those able to work from home or for those supported by the government’s furlough scheme, the question remains: how do you make the most out of your temporary savings boost?
Making the most out of your savings
Many people have used the funds to clear debts – the Bank of England figures show a record of £5bn of credit card debt cleared in April, significantly more than the £300m cleared in a standard month.
Others however, have used these surplus funds to boost longer-term savings, top up pensions and add to investments. For those concerned about their employment status, individuals have also built up cash savings to prepare for the future.
KLO Financial Services
Whether you choose to reduce debt, build up a cash safety net or invest, it’s important that you make sense of where and how you have saved money. In doing so, you can review which opportunities you have to save money and think about whether you can make long-term changes to your spending habits.
If you would like to find out more about making permanent changes to your spending habits and are looking for financial advice, talk to one of our expert financial advisers by calling 01926 492406 or emailing firstname.lastname@example.org.
Alternatively, stay up to date with the latest goings-on by listening to the KLO Talks podcast, available on all major streaming platforms.