Those who have managed to hoard cash plan to spend a third of it, research shows.
Savers who saw their costs fall during lockdown are planning to spend a third of the money they have stashed away when lockdown ends, according to research.
More than two-thirds of those surveyed by Gatehouse Bank said they have been able to save money during the pandemic.
The main reasons are increased working from home, saving on commutes, and holidays and meals out being banned.
Those who managed to benefit from cut costs are planning to spend more than £1,000 each when the country reopens, totalling a potential cash injection of £36 billion when restrictions ease.
Top of the list for post-lockdown spending among those shut in for months are holidays, with 11% hoping to travel abroad and one in 10 intending to take a vacation in the UK.
Home renovation is also a popular choice, with 10% planning a major makeover project.
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However, with ongoing economic uncertainty some plan to bank gains made during the pandemic. A cautious 14% of the population said they were going to invest their nest egg for the future, despite a backdrop of falling savings rates.
Charles Haresnape, chief executive at Gatehouse Bank, said: “The news people plan to spend a third of these funds when lockdown ends will be music to the ears of businesses and the government, who know that an instant injection of consumer spending will be critical for the country’s economic recovery.
“For those looking to put some of those extra savings away for the future, though, the outlook is not so rosy as good savings rates are proving hard to find, so it’s more critical than ever that savers shop around.”
This week, the Moneyfacts UK Savings Trends Treasury Report found saving account rates have failed to rise between December and February (in the run-up to the ISA season) for the past two years.
Product choice fell month-on-month to a record low. There are now 1,387 savings deals (including ISAs) on the market, which is 398 fewer deals available than a year ago, according to the report.
At the same time, inflation rose 0.7% in the 12 months to January, up from 0.6% to December 2020, according to the latest Office for National Statistics data, eating into cash savings.
Bowmore Financial Planning pointed out that cash has historically underperformed as an asset class over the medium and long term and this could continue.
Cash has delivered average annual returns of 4.9% since 1925, lagging behind global bonds (6.6%), rental property (7.2%), gold (7.7%) and UK equities (12.4%).
Jill Ellicott, chartered financial planner at Bowmore Financial Planning, said: “Cash ISAs should not be relied on to create wealth long term – in a normal environment, inflation would easily outstrip the interest rates on offer which leads to the value of savings being eroded over time.”
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