Coronavirus: a third of Brits eating into savings in lockdown

Brits who have had to dip into savings have used about a fifth of the money they have put away. Photo: Gareth Fuller/PA Wire/PA Images

Over a third of Brits are now eating into their savings to support themselves during the COVID-19 pandemic, reseach suggests.

A survey of 2,000 UK adults by Finder found (36%) have had to use some of their savings since the Coronavirus lockdown began on 23 March.

On average, these people have used £1,420 ($1,149.90) of savings over the first seven weeks, which is equivalent to a fifth (21%) of the UK’s average savings pot.

The average savings amount per person in the UK currently stands at £6,760 and almost four in five (78%) Brits have some money put away in the bank. 

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However, one in 10 Brits (9%) have no savings at all, while nearly three in 10 (29%) Brits have less than £600 in savings.

A further three million Brits (7%) are in the dark about how much they have saved or if they have any at all.

Personal finance experts commonly recommend people to have three months worth of living expenses in savings in case they experience a sudden loss of income. For the average Brit, this would be £4,700 in total — £1,560 per month.

Based on this, only 20 million Brits (39%) have enough savings in the bank to support themselves for three months with no income. Two in five (41%) don’t have enough savings for even a month, meaning they are living from pay cheque to pay cheque.

Women said they have less savings, with about £6,090 in the bank, compared to £7,450 for men.

However, during lockdown, a higher percentage of men have had to dip into their savings — 37% compared to 34% of women — and they have used more than twice as much of their savings than the average woman, at about £1,940 compared with £898.

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Across the UK, Londoners have the highest average amount of savings, at about £7,950. However, the high cost of living in the capital means 45% have needed to use their savings during the lockdown. These people have withdrawn about £2,520 each — also the UK’s highest amount.

Those in Northern Ireland have the lowest savings of about £4,110 each. However, they have also used the smallest amount of their savings. The four in 10 (38%) residents who have had to take money from their pot have only used about £264.

Baby boomers have the most savings, with about £9,760 in their accounts, while it is the silent generation who have used their savings less than any other generation. Only 16% have had to use this money, and these people have used about £605.

Millennials have used their savings the most during lockdown, with almost half (45%) needing to withdraw about £1,850.