Lockdown savings and where will we spend them
As the lockdown comes to an end and stores reopen, many of us will be looking to get out and treat ourselves. 62% of households say they have saved money during the pandemic. As a nation, we were saving €2 billion extra per month during the lockdown. These savings were made because our pattern of expenditures changed; not travelling to work or on holidays, not going out for entertainment and eating at home all changed our household budgets significantly.
The pattern of household expenditures and savings changes over time. The pandemic has resulted in an acceleration of these changes, some of which will be permanent. 20 years ago, we didn’t buy any streaming services, apps, smartphones or broadband. Working, learning, and entertaining at home has meant these services have now become central to how we live.
Meanwhile, the relative amount we spend on alcohol has reduced and the percentage of household income spent on food has halved over the last century. Household expenditure on healthcare has increased to over 8% of income.
A century ago, if you lived in inner-city Dublin on an industrial wage, you would have spent one third of your salary on food, one third on rent and incredibly, the remaining one third on coal.
The mix and weighting of household expenditures will continue to change as our values and way of life change. For example, our increasing commitment to environmental and green agendas means expenditure is shifting towards energy efficiency, electric vehicles, and vegan foods.
As expenditure patterns change there will be many opportunities for savings and hopefully, we at One Big Switch can help you find them. You can check out our New and Improved car insurance offer here.
How did your household expenditures change over lockdown? If you have savings, how will you spend them? Share your thoughts below.