It has been possibly the strangest year ever for household finances. A stock market collapse, soaring unemployment, millions deferring their mortgage payments – and a booming housing market, plus bulging savings accounts. Which side of the coronavirus financial equation were you on?

One in three households lost income (and two-thirds of the self-employed)

Analysis by the Bank of England found that 28% of households have seen incomes fall during the pandemic, rising to 66% among the self-employed. Spending has fallen even further, even for those in work. The Bank estimated that 57% of households cut their spending in the early months of the crisis.

By mid-November, a total of 9.6m jobs had been furloughed under government support schemes, at a cost of £43bn, while the underlying unemployment rate had risen to 4.9%. Destitution levels are expected to double, with 2 million families likely to struggle to feed themselves and stay warm, according to the Joseph Rowntree Foundation.

But lots of households got richer, stuffing an extra £100bn in the bank

The same Bank of England data found that 8% of households had benefited from increased incomes and 65% were unchanged during the worst of the lockdown. The big difference for most households was that there were far fewer ways to spend that income than in normal times, so cash piled into bank accounts instead.

The UK savings ratio, which measures how much of disposable income is set aside, rose to 29% between April and June, compared with 6.8% in the same period last year. The ratio is more than twice as high as the previous record of 14.4%, set almost three decades ago.

The Bank of England’s chief economist, Andy Haldane, said excess savings during the pandemic amounted to about £100bn.

Interest rates on those savings fell to only 0.12%

Returns paid on savings accounts went from lousy to almost invisible. The average interest rate available on an instant access account fell from 0.46% at the start of 2020 to 0.12% by October, the Bank of England said. For longer-term deposits, with a penalty to withdraw, the average rate fell from 0.95% to 0.55%.

National Savings and Investments, the government-backed organisation with 25 million customers, cut rates to the bone in November. The return on its Direct saver account fell from 1% to only 0.15%, while on income bonds rates plummeted from 1.15% to 0.01%.

As a result, someone with £1,000 saved in the account will receive 10p gross interest after a year. So, after more than 20 years, you might amass enough interest to buy a cup of coffee.

But even that may appear attractive as the year ended with the threat of negative interest rates.

Rents slumped in London and Edinburgh – but rose elsewhere

An exodus by tenants from London, plus Airbnb owners throwing their properties on to the long-term rental market sent rents in the capital back to the levels of 2014. According to Zoopla, the average monthly rent in London fell 5.2% in the year to November, to £1,596, while in Edinburgh they were down by 1.6%. In city centre locations such as Mayfair and Westminster, rents tumbled even more, down 14%, according to the letting agents Hamptons.

But excluding London, average rents across the UK rose by 1.7% during the year, with increases strongest in the south-west of England and the north-east. Demand from tenants has remained firm while the supply of new properties has fallen back. Young adults have also found it difficult to obtain loans to buy their own homes.

90% mortgages were like gold dust

Despite the post-lockdown housing market boom, first-time buyers were squeezed by the lack of low-deposit loans. For a while, most lenders withdrew from the 90% market, meaning that buyers had to put down a hefty 15% deposit to buy a home. But by December there were signs of a thaw in lending. TSB and Virgin Money launched 90% loan-to-value mortgages in the first week of December, joined a week later by NatWest. Interest rates are high; typically 3.5% to 4%, compared with as little as 1.25% for home movers with large deposits.

Shares sank, with the FTSE 100 down 14% so far this year

Even a vaccine-boosted recovery late in the year has not saved the London stock market from recording a big annual fall. The FTSE 100 index of big companies opened at 7,604 on 2 January and slumped to 4,993 on 23 March, before climbing back above 6,500 in mid-December. That’s still a 14% fall on the year to date. The direct impact can be seen in the big tracker funds popular with small investors that promise to match the performance of the index. If you had £1,000 in either Legal & General’s UK 100 fund or HSBC’s FTSE 100 fund at the start of the year it would only be worth £860 now.

The worst share was IAG (British Airways/Iberia)

Of the shares currently in the FTSE 100, IAG, Rolls-Royce and BP have been hardest hit by this year’s events. IAG was cruising along at £2.50 a share before Covid-19 and dived to a low of 68p before climbing back to £1.55 this week. That leaves it down by about a third on the year. Poor Rolls-Royce (maker of aero engines) was flying at £3.75 a share back in mid-2018 but in the worst of this year’s slump was changing hands at only 39p (and was a bargain at that price as shares are back to £1.15). Among the smaller stocks outside the FTSE 100, Cineworld, Carnival and Capita all crashed with a capital C.

The best was AO.com

The online appliances retailer’s shares took off when the first lockdown started, soaring from 57p each to £3.59, making it the best performer in the FTSE 250. Its sales in the six months to September leapt by 53% as shoppers bought their fridges and microwaves online. The best stock in the FTSE 100 was actually an investment trust, Scottish Mortgage, which is run by Baillie Gifford. It has had huge success investing in US tech stocks, which brings us to …

The fund of the year was Baillie Gifford American, which made 109%

Normally the fund of the year accolade goes to some obscure manager investing in Zambian titanium mines or suchlike, with very few investors enjoying the gains. Not this year. The winner, Baillie Gifford American, is a mainstream fund, from a major investment player with lots of small investors. Its secret? It invested heavily in Tesla, plus a host of other American tech stocks that have soared during the pandemic.

Baillie Gifford American owns more than £500m worth of Tesla shares, which have risen by an extraordinary 650% this year in expectation that its electric vehicles will dominate the car market. The fund also has £500m worth of Shopify, which provides e-commerce for lots of stores and its shares have almost tripled. Oh, and £460m worth of Amazon shares, which have almost doubled so far this year.

Almost everything Baillie Gifford has touched this year has turned to gold. Of the more than 2,000 unit trusts for small investors, five out of the top six absolute best performers this year are run by the Edinburgh-based Baillie Gifford.

Woodford was the worst

The long-drawn-out crash of the former star manager Neil Woodford’s fund dribbled into 2020, even if his fall had nothing to do with the pandemic. According to Trustnet.com, LF Equity Income (the rebadged Woodford Equity Income Fund) lost 61% of its value in the year to 4 December 2020. Joining him at the bottom of the table are a bunch of energy funds that plummeted in line with the oil price.

Terry Smith had another great year

The UK’s biggest fund used by small investors, Fundsmith Equity, has returned 16.3% in the year to date. Managed by Terry Smith, it is now a £23bn behemoth with big holdings in Microsoft, PayPal, Estée Lauder and L’Oréal.

Your pension pot suffered but then mostly recovered

The 14% fall in the FTSE has fortunately not resulted in a similar fall in pension values. Quite the opposite; if you take the example of Nest, the UK workplace pension for 9.3 million mostly low- and middle-income workers, it is actually up 10.3% over the past year. How? Only half of its money is in shares, and of that, much is in American tech companies, such as Apple and Google, as well as Samsung in Korea and Alibaba in China.

Prices in the shops rose by only 0.3%

Discounting on food, non-alcoholic drinks and clothing in November helped pull down the annual rate of inflation to only 0.3% but falling petrol prices had the biggest impact. The average price of a litre of petrol dropped to 112.6p – down from 125.5p last year, while over the same period, diesel dropped from 130.3p a litre to 117.4p.

We almost stopped using cash

Contactless became the new normal this year, with 56% of all debit card payments now tap and go. It is the same the world over – the pandemic has spurred a switch from cash to digital in every part of the globe. UK cash machine withdrawals fell by 60% during the first lockdown and cash now accounts for only 20-25% of transactions, compared with 75% at the start of the century.

Your car insurance premium went down (but not by enough)

During the first lockdown the number of claims on car insurance fell by half and it has stayed low over the year. But while some insurers gave customers a small rebate, according to moneysupermarket.com, average car insurance premiums are down by only 6% this year.

You went a bit silly, not only on toilet paper but also sofas and bikes

During round one of lockdown the supermarket shelves were stripped of toilet rolls but as things calmed down, those fortunate to remain in work started spending – and sofas and bikes were the winners. Cycle sales at Halfords surged by 54% in the six months to October. Meanwhile, British furniture manufacturers reported “crazy good” sales as people chose to spend big on their homes.

And you found yourself paying for yet more TV services

Netflix (£5.99 to £11.99 a month) added about 3 million subscribers in the UK between the end of 2019 and mid-2020, taking its total to more than 15 million. Amazon Prime Video (£7.99 a month) jumped from 7 million to 10 million households, while Disney+ (£5.99 a month), which only launched in Britain in March 2020, is already in 4 million UK homes. The regulator Ofcom says that in April we averaged six hours and 25 minutes each day in front of the box – a total of almost 45 hours a week and a rise of almost a third on last year. Some of the big hits included Tiger King, with 64m global views, Netflix said, and The Queen’s Gambit, with 62m.

Next year you’ll splurge …

Economists are banking on a spending spree by consumers next year, with the Bank of England’s Haldane saying there is “huge pent-up demand”. But this is the Money section, so we feel obliged to say that the one financial lesson from 2020 is that you must always keep a rainy day fund worth three months’ spending in case something unexpected happens, such as a pandemic …