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Michael Brown

Acting Editor
Published: 06/06/2022
man and child shopping at a supermarket

Reduced spending on restaurants, hotels, and transport due to lockdown restrictions were the main drivers behind the fall in spending.

The latest data from the Office for National Statistics (ONS) found that household savings during the pandemic reached their highest level between April and June 2020.

The household savings ratio, which calculates the amount of money households have saved in relation to their total disposable income, peaked at 23.9% in this period. In contrast, this figure was recorded at 6.8% between October and December last year.  

"The ONS reckons the savings ratio would have peaked at just 9% had we been able to loosen our purse strings in pubs and restaurants, and that £144.9 billion of saving was forced upon us by COVID restrictions," said Laith Khalaf, Head of Investment analysis at AJ Bell, an investment platform. 

While it remains no secret that the COVID-19 pandemic forced UK households to save more of their money, much of this can be specifically attributed to reduced spending on restaurants, hotels and transport.

“Analysis of data on business turnover also found that 'high-contact’ industries were more adversely impacted by the coronavirus restrictions that were in place,” the ONS said in its report.

In addition to hotels and restaurants, ’high-contact’ businesses also include storage and transportation businesses.

A change in the rate environment

“Our research showed that in April this year, a third of people still hadn’t spent any of their lockdown savings, and higher earners were even less likely to have dipped into them,” said Sarah Coles, Senior Personal Finance Analyst at Hargreaves Lansdown, an investment platform.  

Those who still have access to their built-up savings pot from the pandemic will be pleased to see rate increases are on the rise across the board.

As documented in the latest Moneyfacts UK Savings Trends Treasury Report, last month the average fixed rates saw their biggest monthly rises in over a decade. 

“Fixed rates still have room for improvement, particularly with the Bank of England base rate rising back-to-back for a fourth time and now standing at 1%, the highest it’s been since February 2009,” wrote Rachel Springall, Finance Expert at Moneyfacts.

Savers today will also benefit from a greater variety in savings products. According to our data, in May 2020 there was a total of 1,548 savings products on the market, including ISAs.

As of May this year, this figure has increased by 137 deals in total. 

What are the current top rates?

Those looking for an easily accessible home for their funds will find new deals on both our easy access savings and ISA charts.

Virgin Money now tops the savings chart with a rate of 1.56%, which comes with a specific set of opening criteria.

On the ISA chart, Paragon Bank’s newly launched Triple Access Cash ISA takes the current pole position.

For the best fixed rates on the market, consider finding your ideal offer by searching our tables.


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