Households rack up £7,000 in Covid savings as prices soar Business

Families have saved almost £7,000 since Covid hit, mainly due to closures when they were unable to spend money in pubs, restaurants, ‘non-essential’ shops, travel and vacations.

But they are unwilling to spend much now to make up for lost time, instead being beaten by inflation and rising bills that are causing consumers to cut spending and shop more cautiously.

Households put aside £195.9billion between the start of 2020 and the end of 2021, according to the Office for National Statistics.

Before the pandemic, families typically saved around 6% of their income. At the height of the first lockdown in 2020, they set aside nearly a quarter of their income as income was supported by schemes such as furlough, while spending opportunities shrank drastically.

Of that money, which averages almost £7,000 per household, the ONS estimates that three-quarters, or £140billion, was ‘forced’ to save because lockdown rules made it difficult to spend money. This represents about 10% of the country’s disposable income, which had raised hopes that shoppers would enthusiastically return to the high streets now that the pandemic has subsided.