Return to Spender: 3.9 Million are Currently Spending More Than They Can Afford to ‘Make Up for Lost Time’ Following Lockdown
- Platform Technology , Money Transfers
- 05.07.2021 10:00 am
New research2 from Yolt, the award-winning smart money app reveals today that over 3 million UK adults have been spending more than they can afford since lockdown restrictions recently began to ease. A further 18% anticipate that the national return to socialising will have a negative impact on their ability to manage their money well.
Lockdown saw the UK’s opportunities to spend severely limited, which resulted in household savings volumes increasing significantly, according to Bank of England data3. It also saw consumers make £16.6bn of net repayments on debts including credit cards and personal loans, the highest amount repaid in over three decades4. However, in just a few short weeks, consumer behaviour has changed significantly with the opening of non-essential retail and hospitality venues. On average since April 12th, UK adults are saving 68% less than they were in lockdown (from £223 a month to £71 a month) and spending 36% more on non-essential items (from £85 a month to £116 a month).
Half of all UK adults admit that social pressure can occasionally be the root cause of their overspending (51%). More than one in 10 people find it hard to tell friends when they can’t afford something (12%) and a similar number find they spend more when they are with friends who have more money than they do.
Pauline van Brakel, Chief Product Officer at Yolt, comments: “It’s natural as lockdown restrictions ease to want to celebrate and catch up on lost time with loved ones. However, it’s important that people continue to keep a close eye on their money management and don’t spend more than they can afford. Our research shows that people often struggle to say no when spending in social situations and can feel pressured, particularly amongst friends that have more disposable income than they do.
“Many people in the UK are still feeling financially stretched due to the economic impact of Covid-19 and we may see this group grow as we begin to see government support schemes such as furlough due to come to an end in the coming months. It’s important to be sensitive to our friends and families during this time and not place undue pressure on people to make financial commitments that might put them in the red.
“As we inch closer to normality, many people will be out of practice for how best to manage their money in social situations. At Yolt, our recently launched evolution of the app is designed to help you manage your finances and keep a close eye on both your spending behaviours and your savings habits.”