New research from Aldermore bank, asking over 4,000 UK adults about their savings habits, reveals that the Covid-19 pandemic has had an enormous impact on savings habits of the younger generations. Millennials (aged 25 to 34 years old) were the biggest savers in 2020, putting away on average £2,459, a 32% increase on 2019.
Generational divide in Covid-19 effect on savings
While the younger generations increased their savings during the pandemic, the older generations focused less on savings overall. There was a 15% drop in average savings among 45 to 54 year olds, a 9% decrease among 45 to 54 year olds, and 65 to 74 year olds saved 6% less in 2020, compared to 2019.
|Age group||Average amount saved in 2020||% change on 2019|
|18 to 24 years old||£1,593||+29.9%|
|25 to 34 year olds||£2,459||+32.2%|
|35 to 44 year olds||£2,728||+2.5%|
|45 to 54 year olds||£1,718||-15.4%|
|55 to 64 year olds||£1,750||-9.2%|
|65 to 74 year olds||£2,097||-5.9%|
|75+ year olds||£1,610||+6.8%|
Many still not savings at all
Over a quarter (27%) of Brits haven’t saved anything in the past 12 months and 20% saved less than last year. This was particularly the case with the older working age group as a third of people aged 45 to 64 years old did not save anything, compared to only 18% of 25 to 34 year olds.
Two in five non-savers said they didn’t save in 2020 mainly due to having nothing left once accounting for necessary outgoings like bills, groceries etc were considered. Other main reasons for not saving showed many were prioritising their focus on other personal finance issues, such as paying down debt (15%), spending on home improvements (9%), focusing on mortgage and rent payments (8%).
Ewan Edwards, director of savings at Aldermore, said: “The routine of saving can bring a lifetime of benefits, so it is brilliant to see young people increase their focus on saving. Lockdown has been a time many have been reviewing their personal finances and learning more about how to make the most of their hard-earned money.
“To those that have not saved last year, it is never too late to start. Money put away regularly, whether big or small amounts, really adds up over time and people will see they are achieving their short and long term savings goals sooner than they may expect.”