A post-lockdown savings slump beckons as people fret about growing living costs, with people aged 45 to 64 suffering the brunt of the anxiety, predicts Aviva.
According to research from Aviva, nearly three-quarters of UK adults (74 per cent) are concerned about rising inflation and living costs, with the sandwich generation suffering the most.
With annual inflation hitting its highest level in over a year from July to August, 79 per cent of respondents aged 45 to 54 are concerned about growing living costs while two-fifths (40 per cent) are highly concerned.
People aged 55 to 64 are the second most affected, with 78 per cent expressing concern about the rising trend in cost for necessities as UK fuel prices approach all-time highs and energy bills increase.
More than a third of adults (35 per cent) say they are more concerned about their future more now than before the outbreak, with those aged 45 to 54 being the most affected (42 per cent ). Another quarter of all respondents (28 per cent) say their stress levels have risen since the lockdown ended and (27 per cent) say their sleeping patterns have deteriorated.
Due to Covid restrictions, monthly household savings reached an all-time high of £27.5 billion in May 2020. According to Aviva, £9.1 billion was deposited with banks and building societies in August 2021, more than the pre-pandemic monthly average of £4.7 billion.
But the lifting of lockdown restrictions is putting further pressure on saving habits, according to Aviva’s data. Only 32 per cent say that lockdown has helped them save more for the future, with those aged 55 to 64 being the most sceptical (42 per cent).
One in three people of all ages believe they have grown more committed to saving after the lockdown ended. One-fifth of those polled indicated they’ve already spent the extra money they set aside during lockdown, and a quarter expect their lockdown reserves would be drained by the end of the year.
Aviva head of savings and retirement Alistair McQueen says: “For anyone approaching retirement, the balancing act between spending and saving can be a big factor in future decisions about their commitments. The pandemic experience has prompted many people to stop and think about what matters most in life, and the end of lockdown means thoughts can now start to shift towards revisiting long-term plans.
“Looking at savings trends before, during and after the pandemic, it’s vital we remember decisions to save or not to save should not be a case of ‘all or nothing’. Realistically the exceptional circumstances of being confined in our homes will remain the high watermark of many people’s savings habits, but putting away a smaller percentage of your monthly income where possible can still add up over the long term.
“Keeping your finances under regular review and shopping around for better deals can help you feel in control of your money. Tools like Aviva’s Mid-Life MOT app provide a way to take stock of your work, wealth and well-being needs to prioritise and take practical steps to improve your present and future prospects.”