Households expect to be £233 worse off a month this year
Almost a third of adults have used their savings to cope with rising prices and a collective £53.3bn has been withdrawn from rainy day funds in the last year.
One in 12 adults have also borrowed money from family members in the last year.
The Health, Wealth and Happiness Index, compiled by the Centre for Economics and Business Research (Cebr) for LifeSearch, fell 11% in a year, to the lowest level seen since the pandemic. The wealth element of the index fell 15%, to a 10-year low.
On average, households are taking out £292 a month from their savings, or £3,506 a year. Of those who are using their savings, 11% are taking out £500 a month or more.
For those who are borrowing money from their families, £401 on average is being taken. One in eight is using other forms of debt, borrowing £579 on average.
Cutting down on hot meals and turning to food banks
One in six of the 3,000 people surveyed by Lifesearch said they were cutting down on the number of hot meals they eat, and 3% were using food banks.
It comes as data shows that three million emergency food banks were handed out in the last year, including more than a million to children.
Over half of those asked (55%), said they were putting on the heating less, 25% are using household appliances less, and 24% said they had switched supermarkets to make savings. One in five (21%) have also changed the way they shop by choosing second-hand shops and budget stores to save money.
To save money, 8% said they now share passwords for music and TV streaming services and 2% said they had stopped giving their children pocket money.
Looking forward, 52% of those surveyed said they feel worse off financially now compared to a year ago and on average households expect to be £233 worse off per month this year.
One in four adults said they were less happy today compared to a year ago and 30% said money was the biggest factor likely to affect their mental health in the next year.
Wealth ‘dragged back down close to pandemic levels again’
Emma Walker, chief growth officer at LifeSearch, 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.”
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