People not spending billions saved during Covid: ING

Dutch households are not planning to spend the accumulated savings from the coronavirus crisis anytime soon. Only an estimated one-fourth of the money saved will be spent again, according to ING economists. Residents of the country put away 22 billion euros more than they normally would have during the pandemic.

An estimated 57 billion euros were saved in the 16 months from March 2020 to June 2021, according to ING. Even without the pandemic, savings would have increased, but certainly not to this extent, experts say. Savings increased mainly because there were fewer opportunities to spend money when restaurants were closed and travel was restricted.

ING notes that the money saved during the pandemic has been unevenly distributed among households. People who already had a decent amount of savings before the crisis accumulated the most. Roughly 71 percent of the savings increase occurred in the wealthiest 50 percent of households. An earlier survey by the Dutch Central Bank resulted in the same findings.

The need for urgent expenditures is greater among lower-income households, according to studies, ING said. In addition, people with higher education are more inclined to save money than people with lower education.

Spending on restaurants, recreation, or culture is less likely to return to pre-pandemic levels, ING states. "For example, someone who has not been to a restaurant for a year will not suddenly go out to eat every day after a lockdown period," the economists say.

The households which accumulated the most additional savings during the coronavirus pandemic also spend a relatively high proportion of their normal expenditures on lifestyle and experiential services. If those households do not immediately return to pre-pandemic spending patterns, a smaller share of the extra savings will be spent, the economists said. They added that Dutch people are typically less inclined to quickly spend large sums of money.