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The UK’s ‘high level of financial confidence may be misguided’
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Paloma KubiakAdults in the UK have strong financial confidence and are good at avoiding debt, but half don’t have any savings a new index reveals.
While Brits exhibit strong levels of ‘financial wellness’, there are concerns the UK’s heading towards a “savings crisis” as they’re struggling to save or build up the necessary assets to secure a comfortable future.
The first-ever Financial Wellness Index which measures confidence, short-term and long-term planning and debt on a scale to 100, also reveals that 40% of 2,000 surveyed don’t have a pension or property to fall back on in emergencies.
Despite the brewing savings crisis, the UK scored well in areas relating to their management of day-to-day finances. Nearly 40% can now measure their exact spending within the nearest pound or two, compared with just 7% who don’t monitor spending at all.
UK adults score highest on the Index when it comes to steering clear of short-term financial difficulty and debt with 27% reporting they’ve no loans or credit commitments to worry about.
Of those who do have regular credit commitments, the vast majority – 75% – are always able to meet minimum repayments.
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Following the financial crisis, consumers are able to make sacrifices of ‘luxuries’ in order to maintain their financial wellness. Nearly 20% have axed their annual holiday while 16% have turned down the opportunity to socialise with family and friends.
As a result, almost two-thirds – 61% – think they would find it very or fairly easy to meet the cost of an unexpected major expense.
Ferdi Van Heerden, CEO of Momentum UK which commissioned the research, said: “Sadly, talking about financial matters is still considered ‘taboo’ in our society.
“Improving financial wellness is not a short-term process – it will take time and commitment from business, government and individuals alike. We hope that raising awareness of financial wellness will lead to meaningful change at both a national and individual level. We want to encourage people to think beyond ‘will I have enough today?’ and to look to the future, to safeguard their families and their aspirations now and in to retirement.”