Raising a glass to economic recovery
As the UK takes its latest steps out of lockdown this week, many have raised a pint in beer gardens and flocked to the pavements of outdoor restaurants.
After months of eerily quiet streets, small businesses, beauticians, hairdressers, gyms and shop owners have helped high streets and city centres roar back to life.
Reasons to be optimistic
This comes as the vaccine roll-out continues at full throttle. Just this week, under-50s are now being offered the jab too as the UK hits its schedule and meets the requirements for the beginning of the end-of-lockdown restrictions.
This week’s economic figures also showed some initial glimmers of hope. GDP from February was not as bad as many commentators had expected, rising by 0.4% despite strict restrictions still being in place during that time. Government figures also found that exports from the UK to the EU rebounded after a slower January.
Lasting impacts on personal finances
While for some segments of the population the lockdown squeezed incomes, for others the restrictions turned many into accidental savers. Office for Budget Responsibility figures last month estimated that the amount of cash sitting in UK bank accounts since the start of the pandemic rocketed by £180bn. In addition, the ONS recently found that the UK household savings ratio rose to a near-record high.
Many months of lockdown have also driven some people to engage much more closely with their personal finances. But as restrictions on our lives continue to lift, there is a debate to be had around whether people will return to their pre-Covid consumption and spending patterns.
It is likely that part of the population who enjoyed higher levels of savings may not want to dwindle these newly found riches so quickly. Indeed, even when lockdown becomes a distant memory, many may want to continue to embed positive personal finance habits.
As we enter the beginning of the end of lockdown restrictions, some of these trends towards spending, saving and consumption will likely have long-lasting effects – even signaling a new beginning for some.
While many people are raring to get out, spend and raise a ceremonial pint to the latest signs of freedom, not everyone is on the same wavelength. Financial services companies should be mindful of this nuance.
However, the new wave of financially engaged consumers is a positive thing for the entire financial ecosystem. It presents a major opportunity for businesses who can tap into this phenomenon and appeal to a growing number of financially educated consumers.