31st December 2015
Financial anxiety among UK adults has spiked sharply since last year and is now back to the same level as 2013, with millions feeling stressed about money every single day, according to new research.
MoneySuperMarket’s annual insight into the nation’s stress levels found that more than a third of those surveyed, at 36%, cited daily money worries as their main cause of stress.
This equates to a massive 18.5m people, 19% more than the 15.6m who felt the same last year.
In fact this year, more than a fifth, at 22% admitted that it is their current financial situation that is causing them the most stress, while 14% worry mainly about their future financial outlook. Some 30% stated they are more concerned about their finances than this time last year.
Those aged 18 to 34 are three times more likely to be worried about their current or future financial situation than those aged 55 or over, at 54% versus and 18% respectively.
Kevin Pratt, consumer finance expert at MoneySuperMarket, said: “Money worries continue to keep many Brits awake at night and after an improvement in 2014, financial anxiety has now shot back up to the same level as two years ago.
“Stressing about money can impact other areas of your life and take its toll on your mental health, so it’s important to understand the options available to help you manage your money more effectively and alleviate some of that anxiety. Something as simple as switching your credit card could help you save money on interest payments each month, and in turn, hopefully help lessen some of the burden.”
Almost half, at 45%, of UK adults believe their financial anxiety will get worse next year, with 29% citing the rising cost of living as the main reason. A further 6% are concerned by squeezes to their benefits, while 3% are worried about their mortgage repayments.
The survey also found that some 53% are frequently or occasionally worried about their finances.
Again, the younger generation suffers more than the older demographic, with two thirds, at 67%, of 18 to 34 year olds stating they frequently or occasionally worry about the state of their finances, compared to 38% of those aged 55 or over. Women feel the strain the most, with 59% saying they worry about money compared to 48% of men.
Financial anxiety has other detrimental effects too. Some 59% who are worried about their money believe other areas of their lives are affected as a result. Almost one in five, or 19% said their money worries affect their health, although this has decreased from the 33% who said the same last year.
A further 14% said their relationship with their partner or spouse has suffered, while another 10% state that another area of their life has been affected.
The nation’s debt mountain appears to be growing too. Some 39% stated they are currently in debt, compared to the 36% who said the same last year but this is slightly lower than the 40% who were in the red at the same time in 2012.
However, 42% of UK adults do think they will be able to clear some type of debt completely within the next five years.
Nearly a third, at 29%, think they will be able to pay off their credit card, while 18% believe they will clear their personal loan and 15% expect to settle their overdraft.
Those who frequently or occasionally worry about their finances plan to make cutbacks to their lifestyle, in order to get their finances into better shape. Half, at 49% will buy fewer non-essential items, 40% will eat out less frequently and 27% will go on fewer holidays. In addition, 25% plan to proactively switch their utilities to a cheaper tariff.
Pratt added: “With a base rate rise looking likely to happen in 2016, the New Year is a good time to review your finances and work out whether you can make any changes to save money on your household bills. Spend some time looking at your outgoings and make sure you’re not overpaying on things like your energy or insurance, as this can make a big difference to your overall balance.
“If you’re feeling really overwhelmed by debt, don’t struggle on your own. Debt charities such as StepChange, National Debtline or the CAB are free and ready to help.”