More than eight in ten consumers have spent significantly less money during lockdown by not being able to buy treats and everyday items, according to new research from AA Financial Services.
The analysis shows those that have saved money, 75% intend to pay off outstanding credit card debts, build up their investments and or add to their savings pot.
The research suggests that many households have seen considerable changes to their finances in the last few months, with 85% of people spending less due to the lockdown restrictions. In a national survey of 2,110 adults, AA Financial Services asked what the average amount of money they had saved in a range of areas by not going out during the period of home isolation. Overall, the biggest savings come from not spending on holidays or city breaks – an average saving of £124 a month. Overall, the average monthly savings made on eating and drinking out is £57.49 a month per person, rising to £79.67 for those in Glasgow.
Other areas consumers are saving on:
- High-street shopping, with an average saving of £53.46 a month.
- Weekend trips and days out, with an average saving of £48 a month.
- Petrol and diesel, with an average saving of £48.
- Car maintenance, with an average saving of £36.16.
- Leisure activities e.g. cinema, concerts, gigs theatre, with an average saving of £36.02.
- Convenience food and ready meals, with an average saving of £27.45.
Regionally, respondents in Glasgow were more likely to save money on holidays (£185.78 Vs. £124 nationally), dining out (£79 Vs. £57.46 nationally) and high street shopping (£78.58 Vs. £53.43 nationally). Londoners were more likely to be saving money on leisure activities (£55.30 Vs. £36.02 nationally), convenience food (£46.72 Vs. £27.45 nationally), public transport (£66.86 Vs. £27.24 nationally) and buying lunch out during a working day (£45 Vs. £23.47 nationally). The biggest reduction in spending for those in Leeds related to their car – for maintenance alone they were found to be saving £62.17 a month (compared to £36.16 nationally), while restrictions on driving has led them to save an extra £58.52 a month (compared to £48 nationally).
The research also asked what people intended to do with the additional money saved during lockdown. Three in four people had plans to repurpose the money (75%), with 31% planning on putting the extra cash into their savings account – a bigger consideration for students (49%) and those living in Edinburgh (45%). More than a quarter said they wanted to put the money away for a ‘rainy day,’ a priority for the over 65’s (31%), while 15% said they intended to use the money to pay off credit card debts, (rising to 22% of 35-44 year olds).
James Fairclough, Director at AA Financial Services said “Coronavirus is impacting our livelihoods, family wellbeing and the economy at large. There are doubts over when the restrictions will be lifted and, for many, what the impact may be on job security.”
“Given this economic uncertainty, it is understandable that many people are planning to use any surplus money they accumulate from reduced spending in lockdown to top up rainy day savings, or clear debts. Whilst the future is uncertain, some people may come out of this period of isolation with their personal finances in better shape than when lockdown began and this will help prepare them to cope a bit better with the challenging times ahead. Going forward, many people will be reflecting on how they can keep costs down once restrictions are lifted – while switching to cheaper shopping brands or changing energy provider may be a good place to start, there is also merit in making sure your car is well maintained to avoid unexpected costs later.”
Average money saved per person / (household?) per month during lockdown
|Net % that have saved money||Average saving per month|
|Pubs / restaurants||95%||£57.46|
|Convenience foods / ready meals||81%||£27.45|
|Petrol / diesel||91%||£48.75|
|Family weekend trips||92%||£48|
|Not buying lunch for work||88%||£23.47|
|Shopping on the high-street||87%||£53.43|
|Kids pack lunches||91%||£16.45|
|Giving up hobbies / sports||90%||£25.63|