• Gen Z-ers (18-24) demographic most likely to say they have increased their savings during lockdown – 45% v UK average of 33%
• Feelings of financial security regarding savings have improved by 4% since Dec’19 across the UK
• The pandemic has deepened the existing financial divide – those with no savings pre-pandemic 8% more likely to say they are saving less during lockdown

In the latest ING International Survey, ING’s Consumer Economics team has measured perceptions of nearly 26,000 Europeans regarding spending and saving during the coronavirus pandemic. The following three trends have been identified:

Gen Z most likely age group to say they have increased savings during pandemic

Gen Z-ers are the age group the most likely to say they have increased their savings in the lockdown months. In fact, ING research found that almost half (45%) of those aged 18-24 claimed to have increased their savings during lockdown, compared with the national average of just 33%.

This aptitude to save, in spite of the country entering recession, has also been echoed by those aged between 25-34 years – with two fifths (41%) saying they are currently saving more. This is contrasted with those between 55-64 years, amongst whom just 23% say they have been able to save more during lockdown.

Lockdown has strengthened feelings of financial comfort

Despite the wider economic uncertainty, the latest research demonstrated that across all age groups, financial comfort regarding savings hasn’t collapsed during the coronavirus pandemic.  ING found that 67% of Britons said they would need more savings to feel financially comfortable – a 4% reduction from research (71%) six months ago.

This increased confidence in financial stability has been felt most keenly amongst those aged between 45 and 54 (13% reduction) and people who are currently employed (7% reduction).

The pandemic has deepened the financial divide

Yet, the ING research also found that those who were in a relatively fragile financial position pre-lockdown, are more likely to be saving less due to the pandemic.

Amongst UK households that do not have any savings, 26% say they are now saving even less, compared with just 18% of those households who do have a savings pot. Similarly, households with less than one month’s worth of take-home pay in savings are nearly twice as likely to say they are saving less during lockdown (26%), compared to households with more than 12 months’ worth of pay saved up –  amongst whom just 14% say they are saving less at the moment.

ING Economist Charlotte de Montpellier commented: “The economic crisis of the coronavirus is of exceptional magnitude, far more so than the financial crisis of 2008. We estimate, for example, that the contraction of GDP in the euro zone will be around 8% in 2020, and that the recovery will last for years. In this context, it is likely that the response of Europeans to the question of how much more in savings they need to feel financially comfortable this question will evolve in the coming months. As the economic crisis makes itself felt among households, they are likely to feel they need more savings, whether because of a drop in income or an increase in mistrust for the future that would lead them to plan for a larger savings mattress.”

ING Behavioural Scientist Jessica Exton commented:

“Coronavirus has influenced perceived spending and saving across generations. It is promising to see some people say they are saving more during lockdown, particularly younger generations who will feel the long-term effects of the pandemic.”

“However, the virus is having unequal financial impacts and reports of a widespread increase in savings mask important distributional effects. A quarter of UK respondents say that their households have no saving and this percentage is virtually unchanged since the crisis. This group is also more likely to say they are saving less during lockdown – meaning the financial divide between those who have a savings buffer and those living from month to month may increase even further in the wake of lockdown.”