“The day we were all awaiting since the pandemic started finally arrived on Monday 19 July and most COVID-19 restrictions in England were lifted.
"Now more than ever, we are left contemplating what the ‘new normal’ will look like and how this long-term picture compares to our pre-pandemic reality. This will also shape the way we spend and save money – what proportion of pandemic savings will be used, within what timeframe, and on what?
"The lifting of restrictions in April and May certainly did trigger a surge in spending: Bank of England data showed that consumers borrowed more than they paid back in May for the first time since August 20201. Household deposits also fell sharply in April before dipping further in May to just £7 billion – less than half the value of March’s deposits, which stood at £14.9 billion.
"There are a range of factors likely to still inhibit spending even as restrictions ease – the ongoing restrictions around international travel and economic uncertainty may well mean people want to delay large expenses, such as holidays, until next year.
"One good piece of news for savers is that rates are on the increase – Savings Champion revealed that 90 rate increases were announced during the first week of July alone. If they haven’t already, now is the right time for savers to sit down and set a firm spending and budgeting plan in place for the next few weeks and months.
"Savers can decide how much they want to spend on expenditures such as holidays, meals out and socialising and save that amount in an easy access account that will still earn them some interest. For the amount they want to save for the long-term, it’s worth considering a fixed-rate product, which will offer a better return.”
A move towards cashless on the horizon?
“The way we spend is also shifting. A recent Paragon survey found that 67% of people used cash less during lockdown than they did pre-pandemic, with two in three agreeing this shift was likely to be permanent. Only 13% of people surveyed anticipated they would revert back to pre-pandemic behaviours once restrictions lifted.
"Amongst the two thirds of people who admitted to using cash less frequently, nearly half of people surveyed agreed that the convenience of contactless payments meant they were more likely to pay by card. Nearly four in ten (38%) felt conscious retailers might not be comfortable handling cash, while one in three preferred not to handle money others may have touched.
"Technology was also a leading factor in influencing how people chose to transact. One in five respondents said they were using cash less frequently due to technological advances, which makes it so easy to pay for goods using smart devices including phones and watches. While card remains the favourite payment method for 67% of users, digital payments have also increased in popularity and have now been embraced by 42%, with 17% choosing digital as their favourite payment method.
"The post-pandemic world we face is likely to include some shifts as new habits form and evolve, and this will possibly include a move towards different spending priorities for many Brits. As society takes tentative steps to normality after months spent at home, the long-term picture of post-pandemic Britain will take some time to take shape.”