Record savings deposited at Nationwide after pandemic slows spending

The pandemic and subsequent restrictions saw households top up their savings accounts in record numbers, according to Nationwide Building Society.

The high street lender revealed deposits during the past year increased by £10.6 billion as shops and the leisure industry remained closed for large parts of the year.

This compared with just £5.7 billion the year before the pandemic.

Nationwide added that those who struggled financially during the pandemic were helped with 256,000 mortgage payment holidays and 105,000 payment breaks for loans and credit cards.

The details come as the mutual revealed pre-tax profits in the year to April 4 nearly doubled from £466 million to £823 million due to a rise in income and cost-cutting measures across the business.

Mortgages remained strong, with customers taking advantage of the stamp duty holiday, although stricter criteria at the bank saw overall mortgage lending down slightly from £30.9 billion to £29.6 billion.

During the year, Nationwide introduced 90% loan-to-value mortgages and also brought in 95% loan-to-value mortgages this month.

Cost-cutting helped with the profit boost, with bosses revealing administrative expenses fell by £94 million to £2.2 billion.

This was in part due to lower running costs during the pandemic and comes as the lender said that in future 13,000 of its 18,000 staff can work more flexibly.

Nationwide said: “Remote working has been popular with colleagues and made us more productive. The flexibility also helps us better serve our members. We are therefore adopting a flexible working model into the future, where colleagues can choose where they work.”

Chief executive Joe Garner said: “This year has shown the financial strength of the building society mutual model.

“It has been a tough year, one that tested the resilience of people and businesses.

“Given the profound uncertainties we faced, we focused on the things that were most important in times of crisis: namely to keep our people and members safe and our society strong.

“We entered the crisis in a position of financial strength and, in the face of a highly uncertain environment, we took steps to protect our finances.”