Compared to the French or the Italians, the British are not savers. 63% of French people save to ensure they have funds in case of an emergency. The Italians save even more, with 79% saving. In comparison, the British are not so frugal at 58%. As a result, they are more financially vulnerable to economic downturns or unexpected events like the impact of the coronavirus.
In a survey conducted by Yolt, the smart money app, respondents were asked how long they thought they could continue to pay for their living costs and any liabilities. Well over a quarter (28%) said that they could last less than a month. Of that, 14% estimated they could last less than a week and a further 14% estimated three weeks at a maximum.
The coronavirus has, however, changed people’s habits and knowledge when it comes to money. According to Yolt, the average amount being deposited in savings accounts was 70% higher in May than in January. Almost half (47%) of respondents said that, as a result of the pandemic, they are using their time during lockdown to better understand their financial situation and to budget.
Again, the Continent makes the British look profligate. 51% of people in France and 65% of people in Italy are also altering their understanding of their finances due to the coronavirus. It is possible that since those countries experienced the pandemic at an earlier date, its impact has had more time to work its way through the budgeting habits of their populations. Once the British emerge from lockdown and adjust to new saving and budgeting habits, a greater proportion might also change their money habits.
What the future holds
As Yolt pointed out: “One long-term impact of the current crisis may be that, having lived through such a profound period of disruption, more UK consumers might continue to save more money for future emergencies.”
Going into the lockdown, just over half of Brits regularly saved money for emergencies. Coming out of lockdown, that number is much higher. So is everyone else’s. The impact of this virus on money habits is international.
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Photo by Kat Yukawa on Unsplash