How did your spending habits change last year?
For some people, 2020 was a year of less spending and more saving.
The latest figures from Barclaycard show that consumer spending was down by 7.1% last year, as the pandemic forced shops, pubs and tourist attractions to close.
It was much harder to spend money going away on holiday too!
These figures from Barclaycard are significant because they track nearly half of all spending on credit and debit cards.
While spending overall was in decline last year, our spending on essential items rose by 4.1%.
It was also pleasing to see that independent businesses won more custom in 2020, with more of us shopping locally.
We spent an additional 28.6% at independent food and drink retailers in 2020, including off-licences, butchers and bakeries.
A separate survey from Aldermore Bank found that the average person working from home during the pandemic managed to save £110 a week.
By working from home, people have saved money on commuting and eating out but faced higher costs associated with utility bills at home.
Rachel Ahmed, head of consumer products at Barclaycard, said:
“2020 has accelerated many trends. E-commerce has seen huge growth, working from home has meant many are shopping more locally and experiences within the home, such as virtual work-outs have become the norm.”
According to the research, online grocery shopping rose by 70.3% last year, as it became the norm for a growing number of households.
Our spend on fuel fell by 20.3%, with cars being used less often and falling petrol prices too.
Barclaycard also reported that we spent 15.6% less on clothes in 2020, with more working from home and fewer going out opportunities resulting in no need for new outfits!
To what extent will our new spending and saving habits stick in 2021?
Consumer confidence research from Barclaycard shows that 57% of us want to increase our support of local businesses.
Changing lifestyles and habits during the pandemic created many cost-saving opportunities, with less money spent on commuting, eating out, socialising with colleagues, takeaway coffees and evenings out with friends.
Ewan Edwards, director of savings at Aldermore, said:
“The saving habits adopted due to the Covid-19 pandemic are likely to continue beyond this period and turn into better long-term spending routines.
“One positive to take from 2020 is it has given some people the opportunity to reflect on how to improve their personal finances.”
The start of this year is a good opportunity to review your spending patterns from 2020 and decide on your budget for the year ahead.