Mental well-being is critical to a healthy, happy life, and there is clear evidence that how we feel about our finances has an impact. According to those surveyed by Penfold, 88% are worried about their finances and financial well-being with over 38% of those saying they are very worried. The impact of the UK cost-of-living crisis is making it more critical than ever for people to take action to understand their finances.
A recent ONS survey found more than a third of those whose cost of living had gone up cut back spending on food and essentials (35%, around 16 million people). As it’s reported that food price inflation is at its highest, with data from research firm Kantar showing that grocery inflation now stands at 13.9%, it’s understandable that concerns will come into question about the costs of everyday items. According to those surveyed by Penfold when asked if they are worried about affording essentials such as food, clothing, housing, and travel over 84% are worried about 36% of these being extremely worried.
Savings are also being impacted as individuals look to cut costs across the board. In the last year, searches in the UK for “opt-out of my pension” have increased by 614%. When asked if they are worried about being able to keep saving into their pension 71% of those surveyed are worried, with 32% extremely worried.
Financial Wellness cannot be achieved overnight and so can have a detrimental impact on our mental well-being as a result. 87% of those surveyed say financial stress is impacting their mental health with 26% of those saying it impacts them a lot. With this in mind, it’s important that individuals are supported, especially by their employers. However, only 16% of people think their employer is supporting them enough with the cost of living crisis whereas 53% of those surveyed say that their employers aren’t doing enough.
Pete Hykin, Co-CEO, and founder of Penfold said: “These survey results show the extent to which Brits are already struggling with the cost of living crisis and we’re extremely concerned to see the impact this is having on saving into a pension. Pausing contributions for only a few months can have a significant impact on your final pot value, particularly for younger savers who lose out on the power of compounding.
“We recommend that savers flag any concerns they have about maintaining contributions with their employer and ask about tax efficiency schemes like Salary Sacrifice with your HR and Finance teams. Ultimately, being able to save for a comfortable retirement should not be a luxury and we need employers to be proactive in ensuring that saving rates are maintained through what is undoubtedly going to be a tough winter for all.”