What’s going on?

A report out on Monday showed Brits saved an extra $1.3 trillion during the pandemic, with the haves yet again out-having the have-nots.

What does this mean?

Household wealth – calculated by subtracting a household’s debts from its assets – has jumped by around 6% in the UK since before the pandemic, with the average family now $11,000 better off. Emphasis on the average family: the richest 10% have $70,000 more in their pockets, while the poorest 30% are up just $120.

There are a couple of reasons why that gap’s so big. For one thing, the increase was mostly thanks to a rise in the prices of stocks and real estate, which are owned in more significant quantities by wealthier people. And for another, the poorest – who work more in the lockdown-impaired services industry – were hit much harder by the effects of the pandemic.

Why should I care?

For markets: You can’t rely on the rich.

The Bank of England is expecting these savings to drive a surge in consumer spending, with British shoppers forecast to spend around 10% of the money they’ve been holding onto. But there could be trouble ahead: if the rich are the only ones with money to burn, the country’s economic recovery might not be as strong as the central bank’s anticipating – which would fit with last week’s disappointing data.

For you personally: Buy into the new normal.
With the last of the UK’s lockdown measures being lifted, workers are finally starting to head back to London: data out on Monday showed the first uptick in the city’s real estate rental prices since the pandemic began. But you don’t need to own an office block to benefit: you could just invest in real estate investment trusts, which give you exposure to multiple properties all in one tidy package.

For information purposes only, not intended to constitute financial advice from us. The customer should assess the risk of  potential loss carefully and individually before investing in any financial products. Dabbl Group Limited is authorised by the FCA under the reference numbers 767263 as an appointed representative of its Principal firm VIBHS Financial Ltd, which is authorised and regulated by the Financial Conduct Authority under the reference number 613381.

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