More than seven in 10 adults (38m people) say that in the last 12 months their household has saved money as a result of reduced spending due to Covid-19, with 4.4m of households saving over £10,000 each.

A combination of reduced commuting, childcare and eating out costs and general living expenses has meant that millions have become ‘forced savers,’ according to new research for LV=.

While many have been unable to save due to reduced earnings, of those that saved money -72% of UK adults - the average amount saved £5,500 during the last 12 months and one in five wealthier households have saved over £10,000

The LV= Wealth and Wellbeing Monitor, a quarterly survey, asked 4,000 UK consumers about their spending habits during pandemic and found most households have spent less and added the money to their savings.

Of those able to save:

• 8% (4.4m) say their household saved over £10,000 as a result of reduced spending due to covid restrictions
• 79% of parents with young children say their household has saved money, and those that saved money saved on average over £8,000 because of reduced childcare costs 
• One in five (1.4m) mass affluent people – those with assets of between £100,000 and £500,000 of assets excluding property – say their household has saved over £10,000. 

UK consumers have been split on how they have used the spare cash with 28% (10.6m) putting the money into savings or cash ISAs. One in five (8.2m) are spending their savings on a holiday. Some 19% (7.4m) are using it for home improvements.

Longer term savings have proved less popular as destinations for the money. Only 5% are saving extra into a pension and only 8% are saving into an investment or stocks & shares ISA. 

Mass affluent people – those with assets of between £100,000 and £500,000 excluding property - are twice as likely as the general population to have put their savings into long-term investments (16% vs 8%),  invested for their children or grandchildren (11% vs 6%) or saved into a pension (8% vs 5% overall).

Clive Bolton, managing director of Savings and Retirement at LV=, said: “LV=’s research indicates that much of the accumulated saving has been concentrated among relatively well-off households. The UK has been divided into two groups: those who are struggling on reduced incomes, and those whose income has remained stable and whose costs have been greatly reduced.

“The past 12 months has been tough for many, especially for those who have been put on furlough, made redundant or who are self-employed. However, those people who have remained in work have been able to save large sums as large expenses such as holidays, commuting costs, childcare and entertainment have vanished.”

• LV= surveyed 4,000 nationally representative UK adults via an online survey conducted by Opinium in March 2021.