59% of people change saving habits because of COVID-19

Almost six in 10 people have made changes to their savings habits as a result of coronavirus, according to new research from Aegon.

A study amongst 2,000 people revealed that 59% of savers have changed their monthly savings since the start of the crisis, with employment status in particular driving significant differences in savers’ actions.
 
Aegon’s research showed the average increase among those who are saving more is £197, but is even higher amongst those in full-time employment. More than four in 10 (43%) of those in full-time employment and not furloughed have been able to increase their savings, with the average additional contribution being £216. Aegon described this increase as “significant” and equivalent to around 10% of average monthly earnings.
 
By contrast, three out of 10 (28%) savers have decreased or stopped saving, with an average cut of £159 per month. The study revealed the greatest reductions in savings have been amongst the self-employed, with over half (53%) having decreased saving by an average of £239, as well as furloughed workers, where more than four in 10 (42%) have decreased savings by an average of £176.

Aegon pensions director, Steven Cameron, commented: “If this divide in savings patterns continues for any length of time, it will have a big impact on the future financial security of different groups.
 
“For those fortunate enough to have continued in employment, there’s been a positive impact on saving. With less money being spent on the daily commute, leisure activities and eating out, our research finds many have taken the opportunity to increase their monthly savings by an average of £197.
 
“But in sharp contrast, the self-employed and those employees who have been furloughed are the groups most likely to have reduced or stopped savings. Hopefully, the cuts in income these groups are suffering will be relatively short lived and they will be soon be able to resume saving for their futures.
 
“In these uncertain times, many have no option but to focus on today’s challenges. But where possible, putting more aside into savings can help people build up greater financial security for their futures. Before making any major changes to savings, it often pays to seek financial advice.”

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