- UK adults set to save on average a record £1,434 in the three months to June.
- More than double the previous quarterly record for household saving of £37.2bn set in Q1 2010.
- Surge in people investing and using digital banking services for the first time.
New research from eToro and the Centre for Economics and Business Research (CEBR) shows that Brits are set to accumulate £75.5bn in savings thanks to lockdown, with UK adults average savings from April to June set to hit a record £1,434. That’s more than double the previous quarterly record!
Attitudes to money are changing – fast!
The restrictions on movement have meant that, despite many workers being furloughed, households have been able to regularly save on travel and other daily expenses.
In fact, the staggering £75.5bn of savings Brits are forecast to make in the second quarter of 2020 will be more than double the previous quarterly record of £37.2bn set in Q1 2010.
The Bank of England revealed households saved a record £16.2bn in April alone and paid off £7.4bn of existing debt, more than three-quarters of which was on credit cards.
eToro’s research can reveal that the global pandemic and subsequent lockdown has sparked a widespread revolution in the way people use and think about money.
More than two-fifths (42%) of Brits – or 22 million people – plan to keep up their new savings habits even after lockdown is lifted, which would turn Britain from a nation of spenders into a nation of savers almost overnight.
Is this the start of a new generation of investors?
It can also be revealed that an estimated 3.8 million UK adults have invested in the stock market for the first time since February this year. This suggests the market volatility caused by Covid-19 has awoken in many the idea of investing in shares as a means of wealth accumulation.
eToro’s research also reveals how coronavirus is speeding up the UK’s transformation into a largely cashless society.
During lockdown, more than a third (37%) of UK adults stopped using cash altogether, the research shows, while an estimated 2.2 million say they won’t use cash again even after the threat of Covid-19 diminishes. This is on top of the 5.5 million people who stopped using cash prior to the crisis.
Lockdown has also led to an explosion in the use of digital banking platforms, the research shows.
An estimated 9.4 million Brits have adopted new apps and websites to manage their cash during lockdown.
Further, more than a quarter (27%) of Brits – or 14.4 million people – expect to increase their use of mobile banking apps post-lockdown.
Iqbal V. Gandham, UK Managing Director of eToro, says:
“Our research shows that lockdown has ushered in a revolution in terms of the way we manage, view and treat money.
“In just a few short months, we have gone from a nation hooked on spending and cheap credit into a nation of savers.
“At the same time, this pandemic has awoken in millions the idea that the stock market can be used as a potent means of generating wealth and prosperity, while many of us have also embraced new, digital ways of managing that wealth.
“The period of lockdown has severely impacted the economy and household finances, but one of the positives is that it has transformed how we engage with money, which will hopefully make us better equipped to manage our finances in the future.”
Pablo Shah, an economist at CEBR, says:
“Brits are on course to save a staggering £75 billion between April and June – more than triple the quarterly levels recorded prior to the coronavirus crisis.
“The period of lockdown has narrowed spending opportunities and encouraged precautionary saving activity, which will bring the household saving ratio to an all-time record high of 23%.
“The survey results also reveal the longstanding behavioural shifts that will be brought about by the period of lockdown. Consumers use of digital platforms to manage their finances is expected to increase exponentially, while the shift away from cash to digital payments also looks set to accelerate.”
Want to join the investment revolution but not sure where to start? Read about eToro Popular Investor Lena Birse and her investment strategy in this blog.
Join eToro today
Your capital is at risk
Research Methodology
The research cited here was conducted by the Centre for Economics & Business Research (CEBR) in partnership with eToro. It includes analysis of the latest Bank of England data on households’ saving and borrowing activities in April 2020. CEBR used this data to forecast household saving for Q2 2020, under the assumption that saving behaviours gradually return to pre-crisis levels between May and October 2020.
This was combined with a survey of 2,000 UK adults (aged over 18) conducted on Tuesday 2 June 2020 using Attest Consumer Research.
———–
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFD assets.
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
Credit: Source link
