Wealth levels in the UK have fallen to a 10-year low, according to the annual LifeSearch Health, Wealth and Happiness Index. The combined Health, Wealth and Happiness Index – compiled by the Centre for Economics and Business Research (Cebr) for LifeSearch - fell 11% over the last year. But the wealth element fell even more sharply (15%) to the lowest level since 2013.
LifeSearch’s data has also revealed that almost one in three Brits have had to raid their savings over the past year to cover rising living costs, depleting their rainy-day funds of £292 on average every month, totalling £3,506 a year. Across the UK, that’s a combined total of more than £53.3bn lost from savings over the past 12 months. Among adults that dipped into their savings, one in 10 (11%) have spent over £500 each month from their savings.
On top of this, one in 12 (8%) people have had to ask their families for money – £401 a month (£4,812 in a year) on average – which means Brits have had to borrow more than £21.6bn from their loved ones over the last year. Furthermore, one in eight people have been forced to take on more debt, either short (8%) or long term (4%), borrowing £579 on average.
To try and cut costs, most people (55%) are putting the heating on less, one in four (25%) are using household appliances less frequently, a further one in four (24%) have switched supermarkets to make savings, while one in five (21%) have shopped in second hand shops and budget stores. One in thirteen (8%) say they share passwords for music and TV streaming, rising to 13% of under 35s, saving them £58 and £74 respectively each month.
According to the LifeSearch study, one in six (17%) people admit they have cut down on the number of hot meals they are having or changed the way they cook, to save around £45 a month, while one in 30 (3%) are saving just under £98 a month by using food banks.
One in 50 (2%) have even stopped giving their kids pocket money, saving around £73 a month, while 16%, rising to 20% among the over 55s, have cut back what they’ve given to charity.
Emma Walker, Chief Growth Officer at LifeSearch who commissioned the study said: “After the record lows we saw in the Health, Wealth and Happiness Index at the height of the pandemic, we experienced some optimism last year when we saw some green shoots of recovery as the Index rebounded. But that was short-lived as the cost-of-living crisis has dragged the Index back down close to pandemic levels again. It may then be no surprise to find Brits’ wealth experienced the biggest falls in the last year, but our health has also dropped, including our mental health which has worsened for one in three of us in the last 12 months. This is then culminated by the revelation that our happiness today has fallen to its lowest point in over a decade.”
Brits anticipate being £233 pm worse off in the year ahead as finances impact mental health
While one in two (52%) say they feel worse off financially now compared to last year, looking ahead to the next few months, Brits expect to be £233 worse off on average per month due to inflation, rising to £546 among Londoners.
LifeSearch found that Brits’ happiness is at a rock bottom low not seen in over a decade, as one in four people (25%) are less happy today compared to a year ago, while 32% of Brits say their mental health and wellbeing has worsened in the last 12 months. One in three (30%) Brits, say that money and just trying to survive financially is likely to have the biggest negative impact on their mental health in the year ahead.
Nina Skero, Chief Executive, Centre for Economics and Business Research (Cebr) who was commissioned to produce the Index for LifeSearch, commented: “The latest edition of the Health, Wealth and Happiness Index shows that 2022/23 was a tough period for households. We expect pressures to persist in the coming year, especially in terms of inflation and spending power.
“Nevertheless, the outlook is somewhat rosier than was the case at the turn of the year, with consumers showing considerable resilience in the face of troublesome economic conditions. This provides some hope that the depths of 2022/23 will not be repeated and that the Index’s components can return to improvement.”
