All on the ONS! Savings boom!
01 October 2020The pandemic has seen most of us seeking up to date information on important economic and health data as it becomes available. Gaining a good source of reliable data has sadly proved to be challenging on occasions, much to the annoyance of most of us.
The Office for National Statistics (the ONS) has been a great source of data, bringing forward some data on the issues faced by the UK into the public realm for all to consider. Of course, some of the information on the relative demise of the UK economy and the speed of its decline has only confirmed what many of us had feared. Other statistics have been fascinating in the effects of most of us working from home for the first few months of the lockdown from March 2020.
One statistic that struck me was the level of savings being achieved in the UK over the second quarter's period (April to June 2020). The findings issued on 30 September 2020 noted that UK household's savings ratio increased to a record level of 29.1% in the period, up from 9.6% in the first quarter of 2020, which in itself was higher than the last few years. Understandably to some extent, households reduced their spending by a record amount, namely £80.5 billion. This is a reduction of 24.2% and reflects the restrictions on movement over the period.
More detail on these statistics can be found here:
https://www.ons.gov.uk/economy/grossdomesticproductgdp/timeseries/dgd8/ukea
On the same day (30 September), following research from the Institute of Fiscal Studies (IFS), the FT reported another effect of the pandemic, with over 1 in 8 older workers, and by older they are referring to the over-50s, having changed their retirement plans as a result of the pandemic. Many respondents have noted that their financial position had worsened. More on this can be found here: https://app.ft.com/content/5b773a97-064c-49b4-ad8a-6485e7b242c3
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These savings can be used in many ways, from paying down debt, such as credit cards, loans and mortgages, to creating an emergency deposit fund, to adding funds to your pension. Now we know that there will not be a Budget this October/November, pension funding still offers most investors tax efficient savings.
Reviewing your savings and financial planning is usually worthwhile and the team at Chapters Financial can help with your plans.
No individual advice is provided during the course of this blog.
Keith Churchouse FPFS
Director
Chartered Financial Planner
Chapters Financial Limited
