Mintel’s research shows that the percentage of adults with over £10,000 in savings increased by 9 percentage points to 49% between October 2019 and November 2020. This is a clear indication of how the pandemic has boosted savings for those able to maintain a stable income. For some, this will be the first time they have built up a sizeable level of savings, and providers have an opportunity to help them make the most of this and sustain the savings habit.

The COVID-19 outbreak has caused huge disruption and upheaval, however, it has also provided a unique opportunity to allow more people to save. There is a clear discrepancy between those on high or median stable incomes and those with lower household incomes. The new national lockdown imposed in early January 2021 will exacerbate these issues further, increasing the gap between those with enough financial security to be able to add to their savings and those struggling financially. Looking beyond the crisis, savings providers will need to understand the differing needs of these groups as they help customers through the recovery.

Understanding how consumers intend to use any savings accumulated during the COVID-19 pandemic will be crucial for providers. Mintel’s research suggests that current accounts have been a key beneficiary of ‘accidental’ or enforced savings that have been driven by a lack of spending opportunities, rather than planned activity. This suggests many will view these funds as temporary savings that are earmarked to be spent as and when the economy starts to reopen later in 2021. If providers are to help customers to establish a longer-term savings habit and build their savings pot, the window of opportunity to do this could be fairly short-lived.

Providers have the opportunity to re-engage with savers in the wake of the pandemic. This could be through the process of arranging savings reviews to advise customers who have built up savings how best to manage this in the longer term. For those facing more difficult financial circumstances, offering tools to help them build, or in many cases rebuild, some degree of financial security could be welcomed as people look to get their financial lives back on track.

• The impact of COVID-19 on the savings market, exploring both the opportunities and threats of the crisis.

• Savings product ownership, recent savings activity and plans over the next 12 months.

• Important factors when choosing a new savings account.

• Attitudes towards savings accounts, including interest in savings marketplaces, the impact of an ultra-low rate environment.

The first COVID-19 cases were confirmed in the UK at the end of January 2020, with a small number of cases in February. As the case level rose, the government ordered the closure of non-essential stores on 20 March.

A wider lockdown requiring people to stay at home except for essential shopping, exercise and work ‘if absolutely necessary’ followed on 23 March. It wasn't until 15 June that non-essential stores were allowed to reopen, followed by pubs, restaurants, hotels and hairdressers on 4 July, and many beauty businesses on 13 July.

By September, it had become clear that the UK was at the start of a second wave, and social distancing measures were intensified. Continued increases in infection numbers led to Wales implementing a two-week national lockdown from 19 October, England announcing a month-long lockdown from 5 November and Scotland introducing a new five-level system of coronavirus restrictions.

Despite these restrictions, however, case numbers continued to increase. All four UK nations tightened restrictions in January 2021, effectively leading to a full UK-wide lockdown. There is no defined end date for the lockdown, although the legislation regarding the English lockdown that was presented to Parliament extends to 31 March.

The UK’s vaccination programme started on 8 December 2020, and with both the Pfizer-BioNTech and the Oxford-AstraZeneca vaccines licensed for use in the UK, the government aims to offer a vaccine to 15 million people by mid-February.

Mintel’s economic assumptions are based on the Office for Budget Responsibility’s central scenario included in its November 2020 Fiscal Sustainability Report. The scenario suggests that UK GDP will have fallen by 11.3% in 2020, recovering by 5.5% in 2021 and 6.6% in 2022. GDP isn’t expected to return to pre-COVID levels until Q4 2022. The central scenario has unemployment peaking at 7.5% in Q2 2021.

The current uncertainty means that there is wide variation on the range of forecasts, however, and this is reflected in the OBR’s own scenarios. In its upside scenario, economic activity returns to pre-COVID-19 levels by Q4 2021. Its more negative scenario, by contrast, would mean that GDP doesn’t recover until Q3 2024.

The second wave of infections and subsequent lockdowns means that the short-term prospects for the country are consistent with the OBR’s negative scenario, but this needs to be balanced against the fact that the vaccine rollout is ahead of even the OBR’s central scenario. Medium to long term, then, we are still basing our forecasts and market analysis on the OBR’s central economic scenario.

This Report provides an overview of the savings market for retail consumers, including the size of the sector and the overall environment for UK savers in terms of macroeconomic trends and interest rates. It focuses mainly on consumer behaviour and attitudes towards the market.

For more detailed analysis of both the cash savings and investment markets in the UK, please see the Mintel Reports Deposit and Savings Accounts – UK, May 2020, ISAs – UK, November 2020, Saving and Investing for Children –UK, June 2020 and Consumers and Investing – UK, October 2020.