Credit, Collections & Insolvency News
A new international study by Yolt, has suggested that UK consumers are less likely to regularly save for emergencies than their European peers, but this could soon change.
Just 58% of UK respondents said that they regularly save money to ensure they have funds in the case of an emergency. This is compared to 79% of Italians and 63% of French respondents. This disparity means that UK consumers are potentially more financially vulnerable to the impact of coronavirus than some of their European peers.
When UK respondents were asked to estimate how long they would be able to continue to pay for their living costs and any liabilities, if their income were stopped today, 14% said less than a week, with a further 14% saying they could last no more than three weeks. This means well over a quarter (28%) of UK respondents estimated they could last less than a month.
The savings habits of many in the UK, however, look set to change. Almost half (47%) of UK respondents said they have taken steps to better understand their financial situation or budget their expenditure, as a result of the coronavirus.
In France and Italy an even higher proportion of respondents said they changed their approach to their finances due to coronavirus: 51% and 65% respectively. Though it is worth noting that both of these countries began experiencing the economic impact of the coronavirus ahead of the UK. It may be that as the UK emerges from lockdown and adapts to new ways of life, a greater proportion of people will begin to change their money habits (just as they have done in Italy and France).
Yolt’s own anonymised data has already shown an increase in the amount of money users are saving, with the average deposited into savings accounts 70% higher in May than at the start of the year. This suggests that coronavirus may well be pushing people who can afford to save, for example those who have reduced their outgoings during lockdown as they’ve stopped commuting and cutback on socialising, to put more of their money aside.
One long-term impact of the current crisis may be, that having lived through such a profound period of disruption, more UK consumers might continue to save more money for future emergencies.
Pauline van Brakel, Chief Product Officer at Yolt, said “Whilst the financial impact of Coronavirus is likely to be felt for many weeks and months to come, it is reassuring to see that people who are able to save during this period, are doing so. Habits are notoriously hard to change, but it could be that this crisis changes the way many people engage with their finances, especially when it comes to saving. There’s never been a more important time to closely manage your money, save where possible and identify areas where you could cut back. Yolt is here to support savers, providing them with the tools they need to free up money for potentially uncertain times ahead.”