Households saved more than one quarter of their income in the second quarter of 2020, according to the Office for National Statistics, which fell to just below 17pc in the third quarter as restrictions eased.
This is still almost three times the usual pre-pandemic savings rate of between 5pc and 7pc.
“It remains far above its long-run average of 8pc, suggesting there is plenty of scope for household spending, and GDP, to rebound strongly once the restrictions are lifted,” said Ruth Gregory at Capital Economics.
When Covid rules were relaxed over the summer, consumer spending jumped by around one fifth, indicating a strong expansion could be possible again when the pandemic is finally defeated by the vaccine.
This is likely to be a global theme, driven by the US. American households have saved $1.7 trillion (£1.3 trillion) through the pandemic, according to Pantheon Macroeconomics, a figure which is expected to rise to $2 trillion in the coming months.
It gives shoppers in the world’s largest economy extra spending power amounting to 4.7pc of GDP, which could be unloaded to great effect in 2021.
More stimulus funding by the authorities does “make us even more confident that consumers’ spending will rocket once Covid is suppressed”, said Ian Shepherdson at Pantheon.
