An impact of COVID-19 on savings: A rising sense of financial insecurity
How has the pandemic changed people’s perspectives on savings?
The pandemic has been an unprecedented and wide-ranging interruption of our normal lives, but it didn’t affect everyone equally. This was certainly true of COVID-19’s financial impact. While many lost their jobs or were furloughed, others benefited from a booming stock market.
The COVID-19 pandemic has generated a sense of financial insecurity—even among the well-off. While the pandemic is a health crisis, the biggest motivator for saving more is “in case I have large, unexpected costs,” reinforcing the evidence that individuals now want to be prepared for unwelcome contingencies.
To gain insights into the financial consequences the pandemic has had on individuals globally, Deloitte Global commissioned a survey of individuals in Australia, Canada, China, France, Germany, Japan, the United Kingdom and the United States to answer a series of questions, including: How has the pandemic affected the savings of different demographic groups? Which groups have been impacted worst? How have attitudes to savings changed? How are people changing their financial behavior in response to these changes? In what ways did these phenomena vary across countries?
This report reveals a pervasive sense of pandemic-related financial anxiety, regardless of how the pandemic affected participants. It yields useful insights into the ways that the pandemic has changed individuals’ financial attitudes and behaviors. It also contains lessons for all those who seek to help people manage their finances in uncertain times. Savers in the post-pandemic world are anxious about their financial future. They have seen that an unexpected crisis can upend the world, and their lives along with it. The financial services industry has a role to play in helping savers prepare in case a similar crisis should strike again.
The financial products and services that savers want:
Before the pandemic, individuals might have been expected to dedicate the bulk of their surplus cash to consumption. Now they have pivoted to saving and investment. This may signal a lasting shift in attitude and consequent behavior. The pandemic has upended so many aspects of our lives. How we feel about our personal finances is one of them. The report also points to the opportunities that await financial services providers as they navigate their way through a long-term change in savers’ attitudes and behaviors.
