Brits more concerned about financial hit of COVID-19 than Brexit

Two in five people are saving more in lockdown, survey finds. Photo: Gareth Fuller/PA Wire/PA Images

People are more concerned about the impact of COVID-19 on their finances than they are about Brexit, a survey suggests.

When it comes to the two major challenges the UK faces — the handling of the coronavirus pandemic and Brexit — two thirds (65%) think the pandemic is more concerning for their personal finances, while just a fifth (21%) believe Brexit is the bigger threat, Nationwide Building Society found.

The findings were published as part of Nationwide’s savings index which was compiled from a survey of more than 11,000 people across Britain in May.

The research found that, despite many households now living on reduced incomes, nearly two fifths (37%) of people had put more into a savings account than they would usually, rising to 45% of 18 to 34-year-olds.

READ MORE: Six in 10 Brits run out of money before payday

Only one in six (16%) people said they had saved less since lockdown started on 23 March.

And more than a third (36%) wish they had saved more before the pandemic struck.

Research from website Moneyfacts found last week that the choice of savings accounts on the market has fallen to the lowest levels since at least 2007. To compound savers’ woes, average savings rates for many types of account are now sitting at record lows.

However, it is still important to have a rainy day savings pot which savers can turn to in financial emergencies.

Nationwide Building Society’s research was carried out as part of its PayDay SaveDay campaign, which encourages people to save the day they get paid to build a financial buffer.

READ MORE: Coronavirus — Brits pushed further into debt in lockdown

Although many have saved more, almost one in six people have had to dip into their savings as a direct result of COVID-19, jumping to more than a quarter of people who are unemployed.

With many people facing uncertainties over their employment prospects and finances, Nationwide’s index also points towards people preferring not to touch their savings at all, if possible.

According to Nationwide’s own customer data, nine in 10 of the society’s members did not withdraw any money from their savings accounts between January and May.

Tom Riley, Nationwide’s director of banking and savings, said: “There’s no doubt that the impacts of COVID-19 have been felt across the savings market.

He continued: “Whether this is the start of a new savings culture remains to be seen, although the pandemic has certainly made us look at the need for a financial buffer for a range of reasons.

“Interestingly, a large portion have changed their savings habits as a direct result of the pandemic, so we may well see a shift in the nation’s savings culture over the coming months as new savings routines begin to stick.”