Spending spree is on the cards as UK household savings reach record high

UK household savings reach record high
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The broadly-based hospitality, entertainment and leisure sectors can take some confidence in the latest data set produced by the Office for National Statistics which showed the household saving ratio rising sharply to a record high of 16.3 percent in 2020.

 

The ratio, which represents the average percentage of disposable income that is saved, compares with 6.8 percent in 2019 and beats the previous record of 14.0 percent which was seen in 1992. The 2020 figure, which was driven by an annual fall in final consumption expenditure of 10.0% from 2019, will fuel hopes that the extra cash will help boost economic growth when businesses reopen.

According to Bloomberg investors are betting on a post-pandemic spending boom with the emphasis on ‘consumer experiences’ leading to comparisons with the ‘roaring 20’s’ when consumers, buoyed by the end of the first world war and the end of Spanish flu, went on a spending spree.

Although some of the new consumerism will focus on premiumisation, analysts are also backing sectors including staycation-oriented hotels, pubs, bars, nightclubs, theme parks and alcohol brands to benefit from the cocktail of pent-up demand and increased levels of disposable income.


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