11 July 2022
New research from Quilter[1] has found that lockdown savings gains have been slashed by the cost-of-living crisis with many forced to use them to meet rising prices, while baby boomers have passed on 16% of their lockdown savings to support younger family members financially.
Despite the widespread reports of people having ‘accidental savings’ stashed away, the new research reveals that just 53% of people were able to put additional money aside into savings or investments during the coronavirus lockdowns, with younger generations less able to save. This means almost half (47%) of the population were unable to put aside any money and now lack these savings to fall back on to see them through the cost-of-living crisis.
Baby boomers were most likely to have saved money, and 59% are still yet to dip into those funds. However, of those who have, 16% have gifted them to support younger loved ones financially during the cost-of-living crisis – many of which will have been unable to save money themselves or will have already needed to use their savings to meet rising costs.
Quilter’s research found that 15% of people have already spent it all their lockdown savings and a further 39% have made a significant dent in their savings – with many spending up to as much as 75%. What’s more, 46% of Brits found themselves needing to dip into these savings more in the past three months (April-June 2022) than in the first three months of the year due to astronomical rises in the price of energy and food.
25% said they used the savings to help meet the rising cost of day-to-day food shopping. Car fuel followed closely behind with 19% using their savings, and 14% spent them on heating and lighting their homes.
Others, however, have managed to keep hold of their savings or have been able to make larger, more indulgent purchases despite rising costs. 51% of those with lockdown savings are yet to spend any of it, while 23% of those who had dipped into their savings said they had used some or all of them to pay for a holiday abroad, 15% spent them on UK breaks and 12% on garden improvements.
While the increasing strain of the cost-of-living crisis has been felt across the board, there is a clear disparity between the generations in terms of people’s ability to save during the lockdowns, as well as the need to spend those savings to help make ends meet:
|
|
Saved additional money due to the lockdowns… |
Proportion of those savings that have been spent… |
What the savings were spent on… |
|||||
|
Yes |
No |
None |
Some (≤75%) |
All |
Essentials |
Luxuries |
Debt |
|
|
All |
53% |
47% |
51% |
39% |
10% |
19% |
15% |
9% |
|
Millennials |
55% |
45% |
45% |
40% |
15% |
17% |
14% |
14% |
|
Gen X |
47% |
53% |
48% |
41% |
10% |
22% |
14% |
7% |
|
Baby Boomers |
56% |
44% |
59% |
33% |
8% |
17% |
18% |
6% |
Ian Browne, financial planning expert at Quilter says:
“While many baby boomers were able to save and were the least likely to have spent their lockdown savings, they have been heavily relied on by family and friends as a result. The fact that 16% have gifted their own lockdown savings to support their loved ones shows just how important it is for people to plan to pass on wealth efficiently, something we could see more of as people’s finances take a further hit during the crisis.
“While many people were able to save during the lockdowns and have had those funds to fall back on during the cost-of-living crisis, almost half were unable to save in the first place and could be left in a financially vulnerable position. Even those who were able to put some money aside have seen their savings rapidly swallowed up by rising costs - particularly on day-to-day bills such as food, car fuel and heating and electricity. Those without savings will be feeling the pressure even more keenly.
“Millennials and Generation Xers have been hit the hardest, with 17% and 14% having spent all of their lockdown savings in the past three months respectively. With inflation marching ever higher, prices are set to continue rising and people with little to no savings to fall back on could begin to struggle.
“It is vital that people take care of their finances, now more so than ever. If you find yourself with some spare cash and would like to help your loved ones, where possible you should seek professional advice from a financial planner to ensure you are passing on your money in the most tax efficient manner possible, while also making sure that you are left with enough money to help see you through this tricky period.”
Additional statistics:
Baby boomers:
- 56% saved money during lockdowns.
- 59% yet to spend any of their savings.
- 16% spent their lockdown savings on helping loved ones financially.
- 22% spent savings on holidays abroad and 21% on holidays in the UK.
- 17% used their savings to pay for essentials.
- 16% spent all their lockdown savings in the past three months.
Generation X:
- 47% were able to save money.
- Most likely to have spent more of their savings in the last three months compared to the first three months of the year.
- Over a quarter (27%) used savings to pay for day-to-day food shopping.
Millennials:
- 55% saved money during lockdown.
- 17% spent all their savings in the past three months.
- Most likely to use savings to pay off credit card debt (17%), car finance (7%) or other finance (17%).
- 6% used savings to pay for regular monthly mortgage payments.
Itemised savings expenditure:
|
Percentage of people who spent savings on… |
||||
|
All |
Millennials |
Gen X |
Baby Boomers |
|
|
Heating/Lighting |
14% |
12% |
18% |
14% |
|
Car fuel (petrol, diesel, electricity) |
19% |
17% |
22% |
18% |
|
Day to day food shopping |
24% |
22% |
27% |
19% |
|
Special occasion food shopping |
4% |
5% |
4% |
3% |
|
Car finance |
5% |
7% |
3% |
5% |
|
Other finance |
9% |
17% |
3% |
4% |
|
Paying off credit card debt |
13% |
17% |
15% |
9% |
|
Garden improvements |
12% |
10% |
10% |
15% |
|
Holiday - UK |
15% |
15% |
12% |
21% |
|
Holiday - abroad |
23% |
23% |
23% |
22% |
|
School/Uni fees |
1% |
2% |
0% |
1% |
|
Gifts for others |
7% |
7% |
5% |
10% |
|
Impulse purchases for me |
10% |
8% |
9% |
15% |
|
Mortgage overpayments |
4% |
4% |
7% |
2% |
|
Paying the regular monthly mortgage payment |
4% |
6% |
5% |
2% |
|
Helping family and friends financially |
8% |
3% |
7% |
16% |
|
Something else |
25% |
30% |
23% |
25% |
[1] Research conducted by Quilter. Fieldwork was undertaken online between 23 – 24 June 2022. Total sample size was 2,000 UK adults, of which 53% were asked additional questions after confirming they had saved money during the lockdown. The figures have been weighted and are representative of all UK adults, as well as those in the Baby Boomer, Generation X and Millennial demographic cohorts.
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