5 years on: How Brits are spending since Covid, and why it matters
How has British spending changed since the pandemic began, and what can we learn? Read our breakdown of a recent Covid spending report and learn key takeaways.
It’s hard to believe that five years have passed since Covid-19 swept our world and changed many people’s lives forever.
Nearly all aspects of our lives changed seemingly overnight when the pandemic began. And while many parts of life have gone back to normal, some features of “lockdown life” – such as the popularity of remote working – have stayed put, seemingly for good.
Turning now to the topic of finance, the pandemic brought hardship to many, especially those working in widely affected employment, such as the hospitality sectors. Others, on the other hand, were able to keep working remotely and thanks to lockdown restrictions, build wealth at a faster rate than normal.
Fast forward five years, and Nationwide has produced a report assessing how Brits are spending today compared to during the height of Covid.
Let’s take a look at the findings and what consumers, savers, and investors can learn from them.
Spending increased by 49% between February 2021 and February 2025
Perhaps unsurprisingly, Brits are spending far more in 2025 than they were in 2021, with the biggest upticks happening around holidays, travel, eating out, and leisure activities.
The Nationwide report says that between February 2021 and February 2025:
- Spending on holidays has increased by 520%
- Leisure and recreation outgoings have gone up by 246%
- Brits are spending 229% more on eating and drinking out
- Childcare and education expenditure has increased by 99%.
Of course, once lockdown restrictions were lifted, it’s natural that consumers were keen to begin travelling and socialising again. What’s more, while some were able to do more of their own childcare while restricted to their homes, the reopening of workplaces means that childcare expenses went up as expected.
There is also inflation to consider. The Office for National Statistics (ONS) reports that inflation peaked at a 40-year high of 11.1% in October 2022. While the rate of inflation has now fallen to 2.6% as of March 2025, this does not mean inflation has “reversed” – it is just rising more slowly, and the effects of double-digit inflation are still felt today.
As such, not only are Brits spending more since lockdown due to greater social opportunities, the cost of goods and services has risen too, causing spending to increase along with it.
So, while the findings are fairly self-explanatory, it is worth noticing how your own spending habits have increased since the pandemic.
If you were lucky enough to continue working through the pandemic, you may have built wealth at a rapid rate. Now, you may find that your expenses have crept up and up – but are they all necessary?
Keep reading for three important takeaways that could help you reassess your habits.
3 important spending takeaways from the Covid report
- Since lockdown ended, you could have fallen victim to lifestyle creep
“Lifestyle creep” describes a concept in which your expenditure rises subtly over time. This can happen if you receive annual or gradual pay increases, or if your circumstances change – as they did once lockdowns were lifted and we were able to socialise again.
Going from being stuck at home to suddenly having the opportunity to travel, eat at restaurants, and enjoy life to the full, it makes sense to treat yourself. But on an ongoing basis, lifestyle creep could gradually eat into your savings and investments, making you feel out of control where your wealth is concerned.
If you can relate to this feeling, it’s worth reassessing your spending and making prudent choices based on your priorities. Cutting back on spending that doesn’t truly improve your life, and keeping your long-term goals in mind, may help you avoid lifestyle creep.
- You could be missing out on important investment opportunities
If your spending has significantly increased since Covid, you could be missing out on important opportunities to save and invest for your future.
While enjoying life today is very important, so too is creating a sustainable portfolio of wealth that helps you maintain your lifestyle securely once you stop working.
Remember:
- It’s often helpful to invest on a monthly basis, benefiting from the “pound cost averaging” phenomenon. In brief, by spreading your investments across a whole year rather than investing a single annual lump sum, the amount you spend on each share will fluctuate, evening out into an “average” that is usually beneficial.
- Despite market fluctuations, historically, investment markets have followed a positive trajectory.
- According to widespread research, exemplified in this infographic published by Schroders, equities are more likely to outgrow inflation over the long term.
If you wish to re-prioritise your spending and free up wealth to invest, working with a Kellands financial planner could be of great help.
- While there may be circumstances outside of your control, proper planning can help
Covid-19 came as a shock to everyone. Nobody could have predicted just how big its impact could have been on our families, livelihoods, and social lives.
Whether your life circumstances change unexpectedly, or sociopolitical events make you nervous about your financial security, we can offer bespoke advice. Our experienced financial planners are well seasoned in helping clients feel more confident about the future, so whatever your plans are, we can help you achieve them.
Get in touch
Email us at hale@kelland.co.uk, or call 0161 929 8838.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.