More than two-thirds of Brits bolstered their savings during the pandemic – but now a majority are splashing the cash on costly home improvements.
These are the findings of a poll of more than 900 people carried out on Instagram by deVere Europe, part of one of the world’s largest financial advisory, asset management and fintech organisations.
More than 16 months since the pandemic hit, some 67% of Britons have managed to grow their savings, the poll reveals.
A follow-up shows that since lockdown restrictions have eased, 71% of those people have splashed out on big-ticket home improvements.
deVere’s results are supported by official UK figures. According to the Office for National Statistics, the saving ratio – which estimates the amount of money households have available to save as a percentage of their total disposable income – climbed to 19.9% from 16.1%, reaching the second-highest level since records began in 1963.
Of the deVere findings, James Green, Regional Manager of deVere Europe, comments: “Many people have experienced financial worry and insecurity over the last 16 months.
“However, others – primarily those who were able to successfully work from home, maintained income levels, or benefitted from the government’s furlough scheme – have accumulated more savings than they typically would have done due to the severely curtailed opportunities to spend.
“The lack of travelling, non-essential shopping, going out and undertaking leisure activities have contributed.
“The vast majority of those who took part in this poll are in social grade ABC1, who mostly do professional work and who are more likely to have been able to work remotely, and have been able to save the most.”
He continues: “Follow-up polls indicate that since the beginning of the easing of lockdown restrictions, a growing number of people are planning to spend part of their savings, or already have done so.
“With people confined to their homes for much of the year amid various pandemic lockdowns, it’s perhaps to be expected that much of these excess savings will be spent on home improvements such as extensions, home-gyms, pools, outhouses, home-cinemas, roof repairs, a redeveloped garden, redecoration and/or new furniture.”
Most of those polled said they will spend around 50% of their pandemic accumulated savings on a combination of home improvements, holidays and social and leisure activities.
James Green notes: “Whilst we all want to splash the cash a little as the restrictions are lifted, I would also urge people that some of the extra money should be ‘put to work’ via a sensible investment strategy.
“In order to be financially secure in the future, saving alone is typically not enough. Investment is an essential part of the mix in order to grow your wealth over the long term.
“Having a properly diversified and regularly reviewed portfolio is universally recognised as key to financial success in the long-term.”
A sufficiently diversified portfolio needs to take into account different asset classes, sectors and geographical regions.
The deVere Europe boss concludes: “Pandemic savers are unlikely to go out and splurge it all this summer, but neither should they save it all either.
“To bolster purchasing power of the additional cash, they should also be seeking to top-up their investment portfolios.”