Yorkshire 'home to some of the worst levels of financial resilience'

Yorkshire is one of the worst regions in the country when it comes to individuals’ ability to withstand a financial shock, new figures can reveal.

According to Yorkshire Building Society’s latest research report, The Nation’s Nest Egg, Yorkshire has a £38bn shortfall in its savings, with only the North East rated more poorly in the report.

The picture is made worse by the fact that in 2019 Yorkshire was one of the higher ranked regions for household financial resilience.

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Covid-19 restrictions imposed on the population over the past 18 months have helped many households across the UK to increase their savings pot.

Savings levels have dipped

However, Britain as a whole still currently sees consumers facing a £371bn savings shortfall.

The report, which was conducted in partnership with the Centre for Economics and Business Research (Cebr), finds that UK adults require a nest egg of £17,465 to feel financially secure, with the average Briton needing an additional £7,220 to reach this goal.

Consumers in Yorkshire and the Humber face a tougher challenge, with the average person requiring an extra £8,798 to feel financially comfortable.

The study seeks to analyse consumers’ financial resilience – their ability to withstand financial shocks and how that impacts their behaviour. It reveals that with the turmoil of the pandemic, financial resilience in Yorkshire fell from 53 out of 100 in 2019 to 40 in 2020.

The UK’s overall financial resilience has improved over the last year, rising to 57 out of 100, up from 44 in 2019.

This score has been determined by assessing four key pillars which can be considered together to present an overall picture of financial resilience: shock resilience, probability of income shock, financial health and ability to plan for difficulty.

The shock of the last year has caused many to reassess their attitudes towards savings, and as a result almost two fifths of those in Yorkshire state they will save more carefully and 38 per cent will spend more carefully post pandemic.

People have also become aware of the impact that money worries can have on their wellbeing, with a third of consumers in Yorkshire stating that greater financial security would make them feel less anxious or depressed.

Nitesh Patel, strategic economist at Yorkshire Building Society, said: “The country has been battling the impacts of the pandemic for the last 18 months, and we can now paint a comprehensive picture of how the crisis has impacted the nation’s financial resilience.

“We know that people’s opportunities to spend have been curtailed whilst many who have been working remotely have found a reduction in their outgoings. This has resulted in additional savings of £190bn over the last 16 months.

“However, whilst Yorkshire and the Humber’s household savings rate may have increased from three per cent in 2019 to 6 per cent in 2020, there are still pockets of society who have been more significantly impacted than others, and therefore are more likely to be in need of financial support and education on how to improve their financial situation.

“In some regions and cities, the increase in financial resilience may have been caused by tougher, longer Covid restrictions being in place, meaning people in those areas were able to save more.

“However, this theory isn’t necessarily reflective across all regions, as Yorkshire and the Humber faced tough restrictions throughout 2020 yet saw a decline in resilience. Interestingly, the region ranked fourth highest for financial health, however performed the worst for planning for difficulty.

“As the economy gets back on its feet, it’s essential that we remember that many people have been made more financially vulnerable by the impacts of the pandemic.”