Yorkshire discovers the savings bug amid lockdown

Joint research by investment platform, eToro, and the Centre for Economics and Business Research (CEBR) forecasts that households in the UK will have saved an average of £1,434 in the three months to the end of June.

The research shows the contrasting fortunes between households lucky enough to have more discretionary income and those who have seen their earnings fall since lockdown started.

More than a quarter (27 per cent) of people in Yorkshire and Humber have saved more than 20 per cent of their income since March 23, an increase from an average of 22 per cent prior to lockdown.

Across the UK, people are expected to accumulate £75.5bn in the second quarter of 2020 – more than double the previous quarterly record of £37.2bn set in the first quarter of 2010.

Although some households have seen their finances improve, not everyone has been so fortunate. More than a quarter (28 per cent) of people in Yorkshire and Humber have not saved any of their income during lockdown, up from 20 per cent in the average month before the coronavirus outbreak.

Despite the challenges many workers in Yorkshire face, a small proportion of people who do have the capacity to save have chosen to start investing. The study reveals an estimated 241,000 adults (5 per cent) in the region have invested in the stock market for the first time.

This suggests the market volatility caused by Covid-19 has brought the topic of investing front of mind for a proportion of the population.

In Yorkshire and Humber 34 per cent of respondents, equivalent to 1.5 million people, say they have stopped using cash altogether.

More than one in ten (11 per cent) people in the region say they won’t use cash ever again, even after the threat of Covid-19 diminishes.

Adam Vettese, senior analyst at eToro, said: “Our research shows that lockdown has transformed the way in which many of us manage, view and treat money.

“In Yorkshire and Humber, like much of the UK, there have been considerable challenges for some families with loss of income and increasing debt. However, we’ve also seen that a significant proportion of households in the region have taken the opportunity to build up their savings and look set to continue this once lockdown is lifted.

“The pandemic has also encouraged thousands of people in the region to consider the wealth potential of the stock market, while many have embraced new, digital ways of managing their wealth. This significant change in behaviour will hopefully lead to long-term benefits for people’s financial outlook and well-being.”

Pablo Shah, an economist at CEBR, added: “The data suggests that Brits are on course to save a staggering £75bn between April and June – more than triple the quarterly levels recorded prior to the coronavirus crisis.

“The period of lockdown has narrowed spending opportunities and encouraged precautionary saving activity, which will bring the household saving ratio to an all-time record high of 23 per cent.”