UK households feel poorer as financial pressures mount, but those with a financial plan are better off at every income level

UK households are feeling the strain of a more uncertain financial environment, with average estimated wealth falling by nearly a fifth over the past year, according to new research from St. James’s Place (SJP).  

St. James’s Place’s fifth Financial Health Report, conducted annually among 6,000 individuals across the UK, reveals that estimated average household wealth (which includes savings, investments and physical possessions but excludes property) has fallen by 17.5% over the past year, dropping from £126,482 in 2025 to £104,329 in 2026. The decline comes amid continued cost pressures, market volatility and ongoing geopolitical uncertainty. 

This decline is reflected in how people view their financial situation, with more than twice as many saying their finances have worsened (34%) over the past 12 months as have improved (17%).

Every day, financial confidence is also slipping. Just 37% now describe themselves as financially comfortable, down from 42% last year, while one in five (21%) say they are struggling financially, up from 16%. Fewer people also feel financially resilient (61% vs 65%), suggesting households are less able to cope with unexpected financial shocks.

For many, rising living costs remain the main driver. Seven in ten (69%) say this is the primary reason their finances have worsened over the past year, with the cost of food and essentials cited by over half (57%). Other factors include a lack of salary increase (19%), higher rent (13%) and increased tax bills (8%).

Planning boosts wealth at every income level, but uptake remains stagnant

However, while financial pressures are weighing on households across the UK, the research highlights big differences in outcomes depending on how people manage their finances. Households with a plan in place to manage their money are consistently in a stronger position, both holding more wealth and feeling more confident about their finances.

On average, households with a financial plan say they have £157,416 in wealth, compared with £70,610 for those without. This advantage is seen across every income level. Among households earning under £20,000 a year, those with a financial plan are around £24,500 better off on average than those without. At the other end of the scale, the gap rises to nearly £200,000 for those earning over £80,000.

Income group	Average level of overall wealth	With a financial plan	Without a financial plan	Difference between those with / without a financial plan
Up to £20k a year	£40,283	£59,223	£34,699	£24,524
£20,001-£40k a year	£77,017	£89,833	£69,178	£20,655
£40,001-£60k a year	£146,095	£162,669	£127,107	£35,562
£60,001-£80k a year	£199,457	£216,186	£171,829	£44,357
Over £80k+	£474,277	£519,634	£325,443	£194,191

The benefits extend beyond wealth. Seven in ten (72%) say having a financial plan makes them feel more confident about their financial position, while half (51%) describe themselves as financially comfortable, compared with just 29% of those without a plan. Three-quarters (76%) also say they feel financially resilient and able to cope with unexpected changes, compared to 52% of those without a plan.

However, despite these clear advantages, uptake has remained flat.  Fewer than four in ten (38%) people have a financial plan in place, unchanged since the research began tracking the nation’s financial health in 2022.

Financial engagement and wealth vary across the UK

Levels of financial engagement and household wealth vary significantly across the UK. Whilst there are a number of factors influencing this, there is a continued correlation between household wealth and planning. 

London stands apart, with an average household wealth of £171,455 and the highest proportion of people with a financial plan in place (46%). By contrast, planning levels are lower in regions such as Wales (30%), Northern Ireland (33%), and Yorkshire and the Humber (35%), where average household wealth is also significantly lower at £86,847, £100,534, and £73,488, respectively.

Elsewhere, 40% of people in the North West have a financial plan, with an average household wealth of £82,968, while in Scotland, 37% of people are planning, and average, wealth stands at £96,918.

Wealth across the UK	Perceived household wealth	Proportion with a financial plan in place
London	£171,455	46%
Scotland	£96,918	37%
West Midlands	£120,093	39%
North East	£103,934	35%
East of England	£99,829	36%
North West	£82,968	40%
South East	£90,581	35%
East Midlands	£111,109	35%
South West	£86,032	37%
Northern Ireland	£100,534	33%
Yorkshire and the Humber	£73,488	35%
Wales	£86,847	30%

Alexandra Loydon, Group Advice Director at St. James’s Place, says: “Many households are feeling worse off, with living costs and heightened global uncertainty weighing on confidence and, understandably, affecting how people feel about their finances and the future.

“What our research shows, however, is that while these pressures are widely felt, the outcomes people experience can be influenced by their attitudes to money management. Those who take a more structured approach to managing their money are better placed to build wealth, feel more confident and stay resilient, regardless of their income or circumstances. Despite this, the number of people with a financial plan has not increased over our five-year research period.

“At a time when so much feels outside of our control, it becomes even more important to focus on the things we can influence. Having a clear plan for your money, and taking small, consistent steps to manage it, can make a meaningful difference – helping people feel more in control and better prepared for whatever comes next.”

SJP outlines simple steps to help build a financial plan:

1. Identify your financial goals – Start by being clear about what you want your money to do for you. This could include short-term goals, such as building an emergency fund or paying for a holiday, and longer-term goals, such as buying a home or saving for retirement. Clear priorities can help shape better decisions and make planning more manageable.

2. Understand your current position – Take stock of your income, outgoings, savings, debts and assets. Understanding where your money is going can help identify areas to adjust and create opportunities to save or invest more consistently.

3. Build financial resilience – Having a financial buffer is increasingly important. Building accessible savings for the short-term, to cover unexpected costs or changes in income can provide greater confidence in uncertain times. As our research shows, investing over the long term is also key when it comes to building financial resilience. Even small, regular contributions can build up over time.

4. Think about saving and investing for the long term – Cash savings play an important role, particularly for short-term needs. But longer-term goals require a longer-term approach. Where appropriate, investing can help build wealth over time, especially when started early and maintained consistently.

5. Review your plan regularly. Financial circumstances change. Reviewing your plan as your situation evolves can help ensure it remains aligned with your goals and priorities.

6. Consider seeking professional advice – For those who would benefit from additional support, particularly in more complex situations, professional advice can provide clarity and structure. As this report shows, those who seek advice are often better placed to navigate uncertainty and build stronger financial foundations.