Europeans loosen the purse strings as restrictions ease

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Research reveals where Europeans are most eager to spend post-pandemic with most Irish consumers planning to splash the cash on new clothes

24th June, 2021, Dublin: New research* from Mobile Bank N26, analyses how the COVID-19 pandemic has affected attitudes to saving and spending across Europe – and indicates a growing sense of financial optimism among consumers. 

As part of the cross European survey conducted by Sapio Research for N26, 1,000 Irish respondents were asked about their spending and saving habits both during lockdown and over the coming months, as restrictions are eased.  

According to the survey, which polled over 6,000 people in Europe, consumers have saved, on average, €145.91 per month during lockdown. What’s more, they anticipate average savings climbing further still to €158.30 per month, once restrictions lift entirely. 

In the Irish context, consumers saved significantly more than the European average. On average, respondents said they saved €173.96 per month during lockdown with an expectation of this increasing to €195.21 per month once lockdown is lifted.

There’s evidence that this cash buffer is bolstering consumers’ financial confidence, as many plan to start spending over the next quarter. 

Over two in five (44%) Irish respondents are planning to buy new clothes in the next three months similar to their European neighbours (41%), with women in particular planning on flexing their spending muscle: over half (53%) intend to go clothes shopping versus 36% of men. Staycations are also high on the wish list, with 29% planning a holiday close to home. A quarter of respondents claim they will be using their money to pay off debts while just over one in five (22%) respondents will be looking to go on a holiday abroad.

Europeans are similarly optimistic when it comes to socialising. Half (48%) feel confident they’ll be able to go on a staycation, with Irish respondents slightly more optimistic (51%). The Irish are also hopeful about meeting large groups of friends or family and going to a restaurant or bar with 53% of respondents indicating their confidence on both compared to the European average of 47% on the same. However, 28% of those who were not confident about meeting friends or family indicated their concern about a potential new wave of the virus and would rather keep their money safe.

With regards to a return to working in an office, 43% of Irish respondents claimed to be confident of doing so within the next six months. Of those who were not confident of a return to the office, 34% noted their concern about the vaccine rollout while others noted concerns regarding another wave of the virus (19%) and their worry about the different strands of the Covid virus (16%).

Alex Weber, Chief Growth Officer at N26, comments on the study: “Many Europeans have clearly used the pandemic as an opportunity to save. This should bode well for economic recovery – and we’re already seeing the seeds of this. There are still barriers to financial confidence, including uncertainty around the vaccine rollout and worries about different strands of the COVID-19 virus. However, as restrictions lift across markets, the dominant sentiments are optimism, and increasingly confidence.”

The research also suggests that younger generations are playing a leading role in recovery. Just 7% of 25-34 year olds say they do not intend to make any purchases in the next three months, compared to almost a third (31%) of over 65s.   

Speaking on the Irish results, Adrienne Gormley, N26 Chief Operating Officer comments: “Many consumers who have managed to save during the pandemic are clearly getting excited thinking not only about when they can spend their money again, but also where they will spend it. A lot of people across Europe have become more conscious of their surrounding area and loyal to their local merchants. This loyalty, combined with a certain level of caution about venturing far afield, is likely to influence where savings are spent.” 

“We are delighted to see that 72% of Irish consumers say the pandemic has made them more conscious of spending money with local businesses and merchants with groceries (47%) topping the list of purchases done locally ahead of ordering a takeaway from a local restaurant (28%). It is such a positive trend to see that the Irish are looking after the small businesses within their communities.

What is also interesting to note is that Irish consumers are saving more than the European average both during lockdown and potentially also after lockdown restrictions are lifted. It shows that Irish consumers are looking ahead to the future, and this is evident with a quarter of people saying they will be spending money to reduce their debts over the next three months with 11% saying they won’t be making any purchases at all in the same period.”

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