Six in ten UK households do not feel financially comfortable despite their wealth having risen by an average of 12 per cent in the last year thanks to better savings rates and good investment performance.
According to a fresh study looking at wealth across Britain, the mean household has seen its assets – spanning savings, investments and possessions – rise from £113,154 to £126,483 over the course of the past 12 months.
A stellar year for US stocks, widespread wage rises and higher savings rates all acted to help push household wealth up over the past year.
But despite the jump in overall wealth, the UK’s parlous economic performance and the the fact wages are yet to catch up with cost-of-living crisis price jumps, have left left to feel their financial situation has worsened.
Nearly six in ten (58 per cent) of households believe their finances to be in worse shape now than this time last year, the study from storied investor St James’s Place found. And of the households that feel more financially vulnerable, 70 per cent cite the inflation that has dogged much of the economy for much of the last two years as the driving factor.
“The financial health of the nation is clearly a mixed picture,” Alexandra Loydon, director of advice, policy and operations at St James’s Place, said. “Looking ahead to the rest of the year, consumer confidence is likely to remain fragile as several factors contribute to ongoing financial pressures on households.”
“To navigate this backdrop, it’s crucial that people take steps to make their money work harder. Our research shows just how much of a difference a financial plan can make in building better financial health, regardless of age, income or where we live.”
The study also found that younger savers were the most likely of any generation to put financial plans in place. Over half of under 35s have orchestrated some kind of plan for their money, compared to just 28 per cent of those over 55s.
Loydon said: ““It’s great to see the younger generation… leading the way in this regard, adopting a proactive approach to both short and long-term finances.
“Building these habits from as early an age as possible, and maintaining them through all stages of life, will stand them in good stead both now and in the future.”