Financial resilience
The Index also reveals stark findings around how financially resilient, comfortable and wealthy the nation feels regarding their current financial situation. Across the whole of the UK, a third (29%) felt financially vulnerable, more than half (51%) stated that they were not financially comfortable and three-quarters (78%) of the population stated they did not consider themselves wealthy.
Those who felt financially vulnerable believe it would take a doubling of their current wealth to make them financially resilient, while for those that do not feel wealthy think it would take ten times their current financial position change this.
Key factors driving financial health
A third of the UK public (34%) reported that rising property prices was the main reason behind their increase in wealth, ranking this as the second highest contributing factor for wealth growth, just behind the leading driver, pay rises (35%). Lifestyle changes enabling greater savings came in third (30%). However, in London, where house prices are much higher than many other parts of the country, 59% said that traditional investments (shares, funds), alternative investments, or cryptocurrency were the key drivers of their wealth growth over the last ten years, compared to 30% of Londoners that attribute wealth growth to rising house prices.
The survey also sought to identify factors preventing people from seeing gains in their wealth by enquiring on the key barriers behind wealth growth – 44% of respondents cited the cost of living as the key impediment behind wealth growth, and indeed the recent ONS inflation figures showed cost of living has surged at its fastest pace in almost 10 years. The next closest barrier was low interest rates, with nearly a quarter (23%) of the respondents stating so, followed by low pay, with a fifth (19%) stating so.
Is having a financial plan the key to confidence?
Less than two in five (38%) people have a financial plan in place for future, according to the research. This ranges from only 30% of people in the North East with a plan to 63% of Londoners with a plan. Of those that have a financial plan, 78% say it makes them feel more confident about their financial position.
Alex Loydon, Director of Partner Engagement and Consultancy, St. James’s Place, comments: “Financial health captures much more than just our total wealth, it assesses the full picture of how comfortable and resilient we feel to handle pressures on our finances. The UK Financial Health Index shows that not only is wealth unevenly spread around the UK, but in some areas, there is a clear mismatch between the reality of people’s wealth and their own perception of being wealthy, meaning that people across all regions are experiencing poor financial health in one way or another.
“Clearly this is a complex picture and there are many factors that are impacting financial wellbeing across the country, and some of these are well outside our individual control while others require collective action. However, with the cost of living rising and greater strains on our money, it’s more important than ever to engage with finances and to have a plan in place. The research shows the impact that can have on people feeling much more confident about their future security and we see the value that provides through the work of our Partners to help clients across the country plan for their future.”
