Brits struggle to meet financial goals due to pressure on living standards

0

Seven in 10 Britons are finding it harder to meet their financial goals today than a decade ago due to falling living standards, new research from investment platform eToro reveals.

Its survey of 2,000 people finds most Britons are now finding it harder to achieve financial security, save for retirement, buy a house or find money for the things they want than they did in 2011.

The main reasons given by the British to explain their difficulties are the rising cost of living (69%), wage growth which does not correspond to inflation (56%), runaway house prices (42%) and economic underperformance (35%).

Data from the Office for National Statistics (ONS) shows average weekly earnings have risen by 29% over the past 10 years, barely outpacing prices, which have jumped 20.2% over the same period .

At the same time, ONS data shows that average house prices have risen by 61% over the past 10 years, more than double the rate of wages. A house now costs around 8 times the average wage in England and more than 12 times in London – a figure that has risen by 40% over the past decade.[1]

Research from eToro shows that young Britons are feeling the crisis in living standards the most.

Some 72% of under-40s say it’s harder today than a decade ago to achieve their financial dreams, compared to 69% of over-40s who say the same.

Similarly, women were much more likely to say it’s harder to reach their financial goals these days, at 74%, compared to 67% of men.

When asked what steps Britons had taken to make it easier to achieve their financial ambitions, 55% said they had reduced spending, 46% had accumulated cash savings, 38% had created a financial plan, 32% had repaid their debts. and 25% had invested in the stock market.

Separately, some 46% of respondents said they believed investing was the best way to achieve their financial goals, compared to just 18% who said it did not.

Broken down by gender, men (53%) were much more likely than women (39%) to say investing was the best way to achieve their financial goals.

eToro Global Markets Strategist Ben Laidler comments: “The UK economy has been in second gear since the financial crisis and, in fact, this has had a negative impact on the standard of living for many people – young people in particular.

“Wages have barely outpaced price inflation over the past decade, while the huge increase in house prices over the past 10 years has made home ownership out of reach for many. many people, especially low-income people or those who want to live in or around big cities.

“It means Britons now need to be much savvier with their money if they are to achieve their financial dreams of saving for retirement, buying a home or simply achieving financial security.

“That means cutting expenses, building up cash savings and paying off debt for most people. However, it is interesting to see that a large part of the population believes that investing provides the answer.

“Perhaps not surprising considering that interest rates on savings have been pitifully low, which often means that savers’ money has not kept up with inflation. It also means that the only viable way to get decent returns over the past year has been to invest in the stock market.

“It has arguably never been easier or cheaper to invest, and we expect more and more people to turn to investing in the coming years, as falling living standards set in. correct or not.”

[1]https://www.ons.gov.uk/peoplepopulationandcommunity/housing/datasets/ratioofhousepricetoresidencebasedearningslowerquartileandmedian

Share.

Comments are closed.