As the virus crisis continues, households are cheering themselves up with some good old-fashioned retail therapy.
The pandemic has again brought the country and economy to a standstill and threatens to inflict further financial woe. But one silver lining for some has been that with no need to commute, and pubs and restaurants shut, they have actually saved money.
According to Bank of England figures, households have saved more than £88 billion since March — an average of £1,627 per person.
Splashing out: With winter approaching and another lockdown in force, many Britons are cheering themselves up with their newfound spending power
And with winter approaching and another lockdown in force, many Britons are cheering themselves up with their newfound spending power.
Becky O’Connor, head of pensions and savings at Interactive Investor, says: ‘Rewarding yourself for saving is important. Having a little bit of sensible fun with your money will keep you motivated to save.
‘If saving is no fun at all, it’s harder to keep at it — so award yourself ‘prizes’ every now and again.’
Ms O’Connor’s own lockdown reward was a £90 pair of Ugg slippers, which she has worn every day since buying them.
‘I’d been thinking about them for years but always just wore thick socks and dismissed slippers as indulgent,’ she says. ‘They were a really worthwhile purchase.’
After months of juggling work and home-schooling, Sarah Coles, from financial services company Hargreaves Lansdown, spent £180 to hire a hot tub for a week.
‘It was cheaper than going away, and I knew it would keep the kids occupied,’ she says. ‘It was an unnecessary extravagance but it cheered us up no end.’
Yet while limited ‘fun’ spending lifts our spirits, it can easily become too much of a good thing.
After months of juggling work and home-schooling, Sarah Coles, from financial services company Hargreaves Lansdown, spent £180 to hire a hot tub for a week (file picture)
Psychologist Emma Kenny says we try to distract ourselves to improve our mood when times are tough.
‘Treating ourselves gives us a chemical kick that makes us feel good,’ she says, ‘and we are more likely to buy things when we are sad, bored or stressed, to take our mind off our emotional state. You also feel excitement when you’re waiting for the goods to arrive.’
Retail sales fell by 19.1 per cent in April, the largest decline since 1995, according to the British Retail Consortium. But by July, sales exceeded pre-Covid levels.
Online purchases peaked in May, accounting for £1 in every £3 spent in the UK, according to the Office for National Statistics (ONS).
Ms O’Connor says: ‘It’s understandable that people who have surplus cash want to make life more bearable with treats — but it’s important to make judgment calls about good and bad spending.
‘Treating yourself to something you’ve wanted for a long time and saved up for is a bit like treating yourself to a nice dinner you’ve wanted for ages and savouring every mouthful, as opposed to eating takeaways in front of the TV that you hardly taste.’
Jade Hayward-Aird, 23, says she has spent an extra £200 a month since the start of the Covid crisis, and she often buys things she doesn’t really need.
‘I must have spent hundreds of pounds on knick-knacks such as jewellery and stationery,’ she says. ‘You end up buying lots of low-value items and suddenly find there’s £35 worth of tat in your basket.’
Her most extravagant lockdown buy was a MacBook Air, on sale for £985 in April, which she bought after seeing a Currys advert pop up on Facebook.
Jade, who works in a prison and lives in Wrexham, says: ‘I already had a laptop and I didn’t need it, but it was on sale with nothing to pay for six months.’
Over the past six months, one online purchase in four has been prompted by adverts on social media, according to Visa — and of these shoppers, a quarter say they bought items on impulse.
London physiotherapist Nell Mead, 42, describes herself as a ‘marketer’s dream’, after spending £500 on products she saw advertised on Facebook but has still not used.
Earlier this year she paid £80 for a fitness programme called BodyBoss but has yet to take it out of the box.
Other health gadgets, costing more than £200 in total, she has hardly touched, while an £80 laptop stand from China has still not arrived.
Nell says: ‘I bought most of those things with the best intentions, but I am wasting money by not using them.’
Psychologist Ms Kenny says one of the biggest dangers of shopping online is how easy it is to spend without thinking.
‘On the High Street there are obstacles that make you pause before purchasing — it’s an effort to wander around the shops and try things on. A lot of the time you might not buy anything at all,’ she says.
‘But online your card details are stored on your phone and you can buy in a couple of clicks. It is all designed to make us buy more.’
Helen Undy, from the charity Money and Mental Health Policy Institute, sounds a further note of warning.
She says: ‘With many people currently facing job loss or reduced earnings, it’s more likely than ever that this impulsive shopping will lead to a spiral of unmanageable debt.’
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