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Savers’ Priorities Post Covid-19

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What are savers’ financial priorities post-pandemic?

We can all agree that 2020 was a rather unconventional year, and one many of us were glad to see the back of! Throughout last year, we navigated our way through lockdowns and tiers, before finally ending 2020 with a very different Christmas than we were accustomed to. Due to the festive restrictions, many of us spent Christmas away from loved ones and had to scale back our plans.

With January behind us, it looks like the lockdown is here to stay for at least a few more weeks. However, with the vaccine roll-out starting to pick up momentum, it’s starting to feel like there is a light at the end of the tunnel.

We wanted to understand how you are feeling about your finances so to help us create a picture we sent out a survey to our savings customers, which more than 2,600 of you completed - here is what we found.

Four in ten Paragon savers spent less at Christmas

Our survey established that 40% of Paragon savers spent less money last Christmas compared to the year before.

Amongst that group, 75% of you named the pandemic restrictions as the main reason for having a cheaper Christmas. Nearly one in four said you wanted to focus on smaller, thoughtful gifts for loved ones, while 43% agreed that you saved money by spending less in the run-up to Christmas due to the lack of opportunity for festive celebrations in December.

Interestingly, more than one in three Paragon savers (37%) gifted more cash to loved ones than usual. This could be a reflection of the current economic climate, with many of you choosing to provide valuable financial support instead of material gifts.

Rainy day fund is top savings priority post-pandemic

In the survey, we also asked you about your long-term plans for any money saved during the pandemic.

Amongst respondents, 29% of you wanted to prioritise topping up your emergency fund with any savings made during the pandemic, while investing in a fixed rate product was close behind, with 28% of you planning to lock money away.

People prioritising savings roughly accounted for the same proportion of people planning for the two most popular expenditures - booking a holiday was a priority for 29% of savers while home improvements plans were top of the list for 27% of you. A quarter of savers also had generous plans for their pandemic funds, with 15% planning to gift some of the money to a loved one and one in ten committing to a charity donation.

The data shows that saving money is still a leading priority for people even beyond the pandemic, which is no surprise in the current economy. While having access to ‘rainy day’ funds is crucial, splitting savings between easy access and fixed rate products is a good way to balance that need while still ensuring you get a good return on your savings.

We would like to say a big thank you to everyone who completed the survey and helped us get some insight into our savers’ priorities!

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*AER stands for Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded on an annual basis.

Paragon Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England number 05390593. Registered office 51 Homer Road, Solihull, West Midlands B91 3QJ. Paragon Bank PLC is registered on the Financial Services Register under the firm reference number 604551