Brits forced to raid savings in order to cope with financial uncertainty
The strain of the cost of living crisis combined with ongoing wider economic problems has forced Brits to change both their spending and savings habits in order to remain financially stable.
According to the latest survey from St James’s Place, 18 per cent of 8,000 respondents have had to dip into their savings, while 41 per cent cut back on spending, in order to afford every day costs and other essential payments, such as rent and bills.
Over 10 per cent of Brits also opted to take on debt to cover expenses, while one in ten delayed or cancelled a major decision, such as buying a home, in a bid to have enough money to get by.
Others chose to bump up their savings, with 23 per cent pooling spare funds either into their cash savings or investment portfolios, while a fifth put more into emergency funds.
Mark Fitzpatrick, chief executive of St James’s Place said: “Periods of uncertainty, especially when major or unexpected events happen, are unsettling.”
“Seeing the immediate impact on finances, feeling unsure of how your money will recover or be affected in the medium and long term, and facing decisions of whether to take action or not, can feel overwhelming.”
Uncertain future
Almost 50 per cent of Brits have noted their financial decisions were caused by feeling increasingly uncertain about the future.
Nearly 80 per cent credited their growing unease to the heightened cost of living and inflation, while 57 per cent linked it to global events such as ongoing conflicts.
Meanwhile, others raised concerns about economic stability, while 45 per cent worry about government support, welfare and long-term care, casting a shadow over potential tax and pension changes in the upcoming Autumn Budget.
Access support
However, those who took advice and carefully considered their options, remained financially on track, with eight in ten believing they can achieve their financial goals.
One in three Brits who have taken financial advice, felt more certain about their future compared to two years ago, as they sought more information and opted for affordable investment opportunities compared to those who had not.
Yet, many Brits are calling for financial advice to be made more accessible, citing it as overly complex and expensive for them to take advantage of, ultimately widening the advice gap.
St James’s Place is calling on both the industry and government to address this problem and allow people to access financial support.
Fitzpatrick said: “Greater access to financial advice boosts optimism and financial confidence, and helps people keep on track to meet their savings and investment goals despite the noise around them.
All parties – government, regulators and the industry – have a responsibility to ensure people can access support that helps them cut through complexity and build a better financial future.”
In addition to continuing to attract a new generation of advisers into the industry, supporting financial education and championing reforms that close the advice gap are key.”