Savings pots were built up by many during the pandemic as coronavirus forced millions to focus on their spending habits. New research highlighted this was especially prevalent among younger savers who may now be struggling with certain temptations.
New data, shared by Raisin UK, has shown that among 2,000 UK adults, on average, 16-24-years-olds feel they will have spent £113.29 more during the first week of freedom than the week before.
This, Raisin UK detailed, showed between July 12 and July 17, Generation Z were still saving but there may have been limits on how much was put away.
Raisin UK shared two case studies which highlighted how the pandemic has changed perspectives among young savers.
Ames, a 24-year-old from Manchester, saved £7,000 over the course of the pandemic and hopes to continue this over the coming months.
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Ames said: “The pandemic made it a lot easier for me to save, and with everything being closed due to not only the national lockdown but also the regional ones, my money would have been spent on clothes, cocktails, and steak – which I now know can get pretty expensive.
“The pandemic has shown me that I am able to save more money in such a short amount of time.
“I know that the pandemic wasn’t necessarily short, but it has shown me that actually, I can save quite a bit in such a short time frame. I am now saving less on a monthly basis than what I was doing, but I am still saving a healthy amount – but of course, my money is going to be saved to put a deposit on a house.
“With restrictions on spending through the hospitality, travel, and retail sectors throughout the year, it’s no surprise that Gen Z had no option but to save their money throughout the course of the pandemic.”
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Similar sentiment was shared by Leoni, a 24-year-old from Cheltenham.
Leoni explained: “Before the pandemic, I was awful at saving so I am really proud I managed to save £7,500 since March 2020. When the lockdowns hit, it meant that I wasn’t doing things I’d normally do – so I began saving that money and turns out I actually started to enjoy watching these savings grow.
“Like most girls, I’d spend the money on shopping trips, meals out, spending too much money on a night out, and general socialising activities like bowling, mini-golf etc. No to mention petrol and transport costs to visit friends, I didn’t realise how much I was actually spending.
“I am so much stricter than what I used to be when it comes to spending money, I have grown my savings account and just want to build more and more, and I have actually started to value what I earn after watching others struggle during the pandemic.
“With my savings, I have managed to buy better furniture for my house. I am saving much less than I was during the lockdowns as I am now back socialising. However, I definitely spend a lot less on non-essential items like extra clothes that I don’t really need, and I try and now socialise by doing cheaper activities like going for walks and spending money on picnic food items instead of going out for meals. It might sound small, but even doing the littlest changes can make a huge difference.”
Raisin UK’s data suggested youngsters are saving now more than what they ever had before.
Raisin UK detailed 24 percent of adults planned to spend their money on going to a restaurant in the UK during the freedom week, followed by clothes (21 percent) and going to the pub (18 percent).
On average, the results showed adults in the UK have saved £769.04 each since March 2020, but higher earners and more stringent savers will have saved much more.
While this may not seem like huge amounts to many, Raisin UK argued younger generations are appreciating how far these amounts can go for milestones such as putting a deposit on a house or saving for a wedding.
The data also showed that, excluding household expenses, people felt they had spent an additional £89.74 more to spend between 19th July until 26th July compared to the week beforehand, whilst various hospitality venues would have done “incentive deals” to welcome back customers.
Raisin UK concluded by noting: “It’s clear young people are preparing to spend more than the previous 18 months.”
Despite this, Kevin Mountford, the co-founder of Raisin UK, argued younger generations are showing more restraint overall.
Mr Mountford said: “If you take any positive out of the pandemic, it’s that a younger generation had a taste of what it was like to save – not because they wanted to, but because they had to.
“What we’ve seen here is that yes, 16-24-year-olds were spending £113.29 more during the first week of freedom day, but that £113.29 is probably a fraction as to what they have saved.
“This isn’t the case for all 16-24-year-olds, however. Some would have been put on the furlough scheme, whilst some of them were working on the front line. As a nation, it’s shown us how vital savings actually are, and what we can do with the money that we save if we have to do so.”