A third of consumers expect their financial situation to worsen over the next 12 months, according to a new survey from PwC.
The report highlighted the “disproportionate” impact of the crisis on lower-income households, which were largely “more exposed” to sectors under lockdown, such as hospitality and retail.
According to the survey, poorer households were the “hardest hit” by the pandemic, with 38% of households with an income below £20,000 reporting a decrease in finances since the crisis began.
Higher income households fared slightly better, however, with only 31% of households earning above £20,000 reporting less money in the bank.
Furthermore, 25% of households earning between £20,000 and £50,000 reported an increase in their cash balances, compared with 22% of those earning above £50,000 and only 15% of those earning £20,000 or less.
Jing Teow, senior economist at PwC, said: “Increases in bank balances have likely been driven by less socialising, not having to commute, and savings from having meals at home. Households that have seen a boost to their bank balances could therefore have sizable amounts of unspent disposable incomes.
“Given that this could be about 12% of pre-COVID average weekly household spend, or around £70 per household per week, some ‘pent up’ consumer spending could be released once the lockdown is lifted.”
He added: “While this could take time to filter through, our survey shows that up to 36% of consumers are planning to spend some or all of the extra cash. The most popular categories of spend are for home improvements and household furnishings, arguably due to the increased amount of time spent at home due to the lockdown.
“Spending on holidays, cars and eating out are lower on the list of priorities, perhaps reflecting uncertainty as to when broader lockdown and travel restrictions are lifted.”