Coronavirus lockdown hits both spending and saving
THE average UK household is spending £171 a week less in the lockdown, as holidays, eating out, buying clothes, and trips to the hairdressers, cinema, theatre and museums are ruled out.
Despite this, many are struggling to build savings as their earnings have been hit during the crisis.
The inability to save is now the UK’s No.1 financial worry, named by one in four, with a similar number concerned that stock market volatility has shrunk their pensions and investments, hitting retirement plans.
One in five is struggling to pay basic household bills as their income has taken a hit, with millions furloughed or losing their incomes altogether.
There are some areas where we are spending more – on tea, coffee, gas and electricity, chocolate and TV streaming subscriptions such as
Netflix and Sky. Aviva head of savings and retirement Alistair McQueen said households who have money spare should put it to work.
While everybody needs an emergency fund to cover, say, six months of income, consider investing long-term savings in a pension or Isa. “Small extra savings today can make a big difference tomorrow,” he said.
Others will find setting money aside hard, with women less likely to have cash to spare at the end of the month, McQueen said. “They have been disproportionately affected by the lockdown, as many work in affected sectors such as hospitality and retail.”
Young people aged between 25 and 34 are most concerned about losing their job due to Covid-19. “They spend a greater proportion of their income on housing bills, which remain unchanged.”