- Three-fifths (60%) of adults expect to be worried about their finances after the Autumn Budget is announced
- Three-quarters (75%) of those with concerns are worried about the cost of living increasing following the Autumn Budget, while 53% are concerned over inflation, and 50% about the outlook for the UK economy as a whole
A rise in the cost of living tops the list of concerns (75%) for those worried about the impact the Autumn Budget – scheduled to be delivered by the Chancellor on 27 October – will have on their finances, according to research by Fidelity International1.
Currently just over half (54%) of UK adults are worried about their finances, but three-fifths (60%) think they will have more concerns after the Autumn Budget, emphasising the apprehension ahead of next week’s announcement. Alongside worries over the cost of living rising, consumers are concerned about inflation (53%), the UK economy (50%), the effect of the Covid-19 pandemic (36%), and supply-chain issues (35%).
|TOP 5 REASONS FOR CONCERN ABOUT POST-BUDGET FINANCES|
|Cost of living increase||75%|
|Concern over UK economy||50%|
|Effects of Covid-19 pandemic||36%|
Concerns over finances after the Budget is also greater among women than men (66% vs. 55%), with women more likely to be concerned about the cost of living increasing (78% vs 70%). Those aged 55 or over are also more likely to be worried due to the cost of living increasing (86% vs. 75% total), as well as inflation (62% vs. 53%) and the state of the UK economy (60% vs. 50%).
Against this backdrop, Maike Currie, investment director at Fidelity International, has put together a Budget ‘Wish List’ of what she would like to see the Chancellor address in the Autumn Budget this year.
- Help with the cost of living: “Rapidly rising prices are starting to hit consumers hard, and with inflation on the up and an interest rate rise touted for as early as December, more action from the Government is needed to help millions of people get by. Supply-chain bottlenecks have drastically pushed up prices, increasing the cost of everyday living for many people in the UK. Research from The Investing and Saving Alliance (TISA) has shown that many people are missing opportunities to secure their future financial security due to a lack of access to guidance2. Relaxing the rules around providing personalised guidance could help close this gap at a time where people need to make their money work harder than ever.”
- Close the gender pension gap: “While most lockdown restrictions have come to an end, the repercussions of women’s experiences over the last 18 months may reverberate long into the future. Due to the structure of the labour market, and the burden of childcare, many women lost jobs, productivity and the opportunity for promotion and progression during the pandemic. This needs to be addressed. Reviewing rules around employers continuing to pay contributions at pre-maternity rates while on maternity leave, or missed contributions being backfilled by employers once a woman returns to work, could be policy game-changers.”
- Protect retirements: “The suspension of the triple lock – where the state pension rises each year in-line with whichever is highest: inflation, average wages or 2.5% – is by no means a long-term solution. Average wages rising by 8.8% this year3 was a statistical anomaly created by the furlough scheme. A more resilient future strategy is needed with an overall review of the UK’s workplace, state, and personal savings, considering both eligibility for automatic enrolment and how the coverage and quantum of contributions might increase in the future.”
- More flexibility for women: “Many women were forced to take time off during the pandemic to care for children or elderly relatives. We know some women still struggle to progress in their careers due to a myriad of issues including the cost of childcare, struggles with social care and even menopause. Investing in education around gender in the workplace is vital in addressing these barriers. Measures that support women re-entering or remaining in the workforce by exploring more wide-ranging flexible working policies and improving the state of childcare in the UK could help.”
- Realistic support for going green: “We all know the importance of addressing the climate emergency, with ESG (environmental, social and governance) becoming increasingly popular among investors over the past year. However, the cost of going green in our homes is something many are concerned about, especially if it means making expensive refurbishments to items such as boilers or insulation. The Government has already proposed providing subsidies of up to £5k for those looking to install new carbon-friendly heat pumps when they need to replace their gas boilers, but this may not go far enough. A more in-depth review into the real-term costs of these improvements could encourage homeowners to make the switch.”
1 Source: Research was conducted by Opinium Research commissioned by Fidelity International. The survey is based on a sample of 2,000 UK adults between 12 and 15 October 2021.
2 Source: The Investing and Saving Alliance (TISA) report, ‘This time it’s personal’, July 2021.
3 Source: Office of National Statistics (ONS) Average Weekly earnings, published August 2021.Growth in average total pay (including bonuses) was 8.8% April – June 2021.