Scottish Friendly warns this is the rainy-day savers have been preparing for as millions look at ways to boost their income

  • Millions of savers are relying on rainy-day funds to cope with the impact of coronavirus

  • One in five (21%) planning to draw money from easy-access savings accounts and 13% will consider requesting a mortgage payment holiday

  • Nearly one in ten (9%) may reduce or stop regular stocks and shares ISA contributions

Savers who have a rainy-day fund set aside shouldn’t be anxious about drawing on their cash, according to Neil Lovatt, commercial director at Scottish Friendly.

New research conducted by the Glasgow-based mutual reveals the financial impact of coronavirus could see millions of Brits dip into savings to supplement their household income.

More than four in ten (45%) savers in Britain said they expect to draw money out of savings and investments to cope with the impact coronavirus is having on their household finances.

The most likely place they will look to source cash from is easy-access savings accounts, as selected by over one in five (21%) respondents. A further 19% of people are set to reduce regular savings into their cash accounts.

Less than one in eight (13%) homeowners will consider requesting a mortgage holiday from their bank and fewer than one in ten (9%) respondents will reduce or stop regular contributions into a stocks and shares ISA.

The study of 1,000 Brits which was conducted a week into lockdown shows 44% of respondents are worried about their job security compared to 29% who say they are unconcerned.

Moreover, a third (33%) of respondents believe it is likely they will be unable to pay some household bills over the coming weeks due to the knock-on effect coronavirus is having on their income.

Neil Lovatt argues the coronavirus crisis is the rainy day many savers have been preparing for.

He says:

The recent changes to many people’s employment status has had an adverse effect on some household’s income and people are clearly looking at ways to shore up their finances, as the figures show.

The sensible thing to do if you’ve seen a drop in your earnings and have less disposable income, is to pause your regular savings or investments.

If you have a rainy-day fund set aside then now could be the time to draw on that pot of money because frankly if this isn’t a downpour then what is?

For those individuals who might have a diverse portfolio of savings and investments, consider drawing down from your better performing assets, rather than sell evenly across your portfolio. In other words, use the diversity of your investments to give yourself some much needed stability and security.

When, in the future, the climate is a little brighter that’s the time to switch back on your regular contributions and repair your portfolio getting back to a diverse mix of assets.

Remember that the value of investments can go down as well as up and you could get back less than you paid in.

The views expressed in this press release are those of the author and no advice has been provided by Scottish Friendly.

Survey of 1,000 consumers conducted by 3Gem Research & Insights between 27/03/20 and 30/03/20