One-third of UK adults now believe they don’t have a healthy relationship with money (34%). Those most impacted are millennials, who are almost 4 times as likely to have an unhealthy relationship with money compared to those aged over 55 (22% v 6%). This is according to new research by first direct in its third Money Wellness Index, which investigates 4,000 people’s attitudes and behaviours towards money following an unprecedented 12 months.
Despite this, the ‘Money Wellness Index’ shows an overall money wellness score of 49 out of 100 This represents a 2 point increase from the same period the year before (47), highlighting a slight improvement in how people in the UK overall feel about their money.
However, there are significant fluctuations across different demographics in the UK:
- 18-24-year-olds have the lowest money wellness score (44), whereas those aged 55+ – with a likely higher level of income and savings, together with a higher proportion of home-ownership, job security – exhibited the highest score of any age group (57).
- There are also differences between how men and women relate to and manage their finances. One-quarter of men claim there is no one they would feel confident talking to about money (24%), while almost half of women would talk to their family or friends about a financial issue (47%).
- In terms of regional differences, the Index showed people living in Yorkshire and Humber (52), Wales (51) and the South West (50) have the highest money wellness scores, with the East Midlands the lowest (46).
Chris Pitt, CEO at first direct, said: “Despite this turbulent year, the Money Wellness Index reports many of us have been able to reduce some of the worries surrounding managing our money. However, this doesn’t tell the whole story as the pandemic has also widened the differences in society to their highest ever levels.
“It’s hit younger adults the hardest – with the lockdowns impacting people entering the labour market, and furloughing particularly impacting service industry roles where younger people make up a higher proportion of the workforce.
“With the vaccine rollout indicating an end is in sight, now is the time for consumers to prepare for the future. By examining our finances regularly, and thinking about our goals and what’s important to us, we can prepare for the new normal.”