The pandemic has reportedly created 6 million accidental savers, but what’s the best way to use this extra cash?
The effect of the lockdown on millions of bank accounts has been to boost savings for people whose incomes have remained the same but whose spending has dropped. With the prospect of life returning to a new normal, it’s a chance to think about how to make the most of these savings and build on them too.
Working from home meant the cost of commuting was put on hold. Holidays were not booked, and the closure of restaurants, bars, and entertainment venues cut spending in those areas, resulting in slightly healthier current accounts.
All this, the Bank of England estimates, resulted in over £125 billion saved in 2020. Its survey does note that only a fraction of this is likely to be spent by households, suggesting a cautious approach. This is understandable given the drop in income for furloughed employees, the loss of income for the unemployed, and an unstable job market.
Leaving your savings in a high-street bank account won’t build much interest. But there are options out there for those who want better returns on what they’ve saved:
Aside from investing, there are some useful ways to use any extra money saved during lockdown:
A great place to start with all of these options is to create a budget that tracks your income every month compared to your spending, allowing you to work out how much you can put aside.
Our trusted financial advisers are here to help you find the best ways to invest your money to make the most of your savings — whatever your situation.
The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested. HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes that cannot be foreseen
Our team of financial experts can help you with your financial queries from financial protection to finding an investment deal. We can also give independent no-obligation advice on personal pensions and more – get in touch today or email [email protected] – we’re here to help.