But what do UK adults fear will impact their personal finances the most, and how is it affecting the way we manage our affairs?
According to Handelsbanken Wealth and Asset Management‘s survey, almost half of adults were worried that their standard of living would drop over 2024 and beyond, with the majority citing concerns around the general cost-of-living crisis as well as the lingering effects of inflation as the driving factors behind this.
Lower standards of living were a particular worry for those in their 30s, with more than half (55%) of this age group fearing a drop in their day-to-day financial wellbeing, compared to just 38% of people aged 55 years or older.
These generational differences are unsurprising. Those in older age brackets, for example, are far more likely to find themselves in a situation where they have paid down their mortgages, whereas the younger among us are going to be feeling the squeeze of higher costs more strongly – particularly around their mortgage repayments.
It is also the case that most younger people will have grown used to the low interest rate environment we have enjoyed for much of the period since the global financial crisis. As a consequence, many people in their 20s, 30s and 40s have acquired substantial levels of debt, such as their mortgages, and they may need to liquidate some assets to manage this.
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How does this affect the way we manage our finances?
These financial worries are encouraging people to spend additional time getting their financial affairs in order. Rising costs and higher inflation, the desire to save more money (or to, at the very least, get better value for their money), among other factors, mean that just over two-fifths (41%) of UK adults have planned to spend more time on their finances – including bills, groceries, and general household finances – over this year than they have done historically.
However, this is not the case for everyone. A significant number of people plan to spend less time reviewing their financial commitments, with anxiety being the primary reason for a third of those surveyed. A clear generational pattern arises once more, with 35% of 18-34-year-olds reporting that financial reviews make them too anxious, compared to just 19% of those over 55.
While it’s easy to see why younger generations might shy away from thinking long term, building a financial plan that can create a solid roadmap and a sense of security and purpose is vital. The earlier people start, the better – get ahead of those financial regrets that plague the nation.
What are our biggest financial regrets?
Indeed, our research revealed that Brits’ biggest financial regret is not consistently saving from an early age, followed by amassing too much debt and not starting a pension early enough.
Today’s financial landscape is of course completely different to where we were 30 or 40 years ago. Defined benefit pension schemes are no longer as commonplace as they were before and students are incurring much higher levels of debt, for instance.
But it’s not all doom and gloom. Around a quarter of Brits say they have no financial regrets at all – a figure that reaches 39% for those aged 60 or over – and many of those we surveyed had major financial accomplishments to speak of, including getting on the property ladder when they had the chance, along with paying off debt, and saving consistently from a young age.
The key is to not let short-term demands on your finances stop you from making a long-term financial plan. Reviewing your strategy regularly to ensure it continues to match your personal circumstances and goals is essential, as is working with a trusted adviser who will help to shield you against the more challenging economic conditions that we currently face.
Alasdair Wild is area manager at Handelsbanken Wealth and Asset Management
