Financial anxiety decreasing among households for first time in three years

Financial worries among UK adults have decreased for the first time in three years, according to new research from MoneySuperMarket.

Annual research carried out by the comparison site gathered insight into the nation’s stress levels. It found that 15.6 million people (31 per cent) are most concerned about their finances on a daily basis, compared to 18.4 million (36 per cent) in 2013, and 34 per cent in 2012. While the financial anxiety figure is falling, money worries still remain the nation’s main stress.

Of those who cite money worries as their biggest concern, one in six (17 per cent) say it’s their current financial situation which is causing the most stress, with a further 14 per cent worrying about their future financial outlook.

It’s not just finances that are causing stress for Brits, with 16 per cent admitting they are most anxious by their health and another 11 per cent by their job. A relationship is the biggest strain for twelve per cent, while a quarter (24 per cent) are not concerned by any of these factors. Those aged 18 to 24 are more than twice as likely to be worried about their current or future financial situation than those aged 65 or over (46 per cent and 18 per cent respectively).

Dan Plant, consumer finance expert at MoneySuperMarket, said: “It’s great to see that the number of sleepless nights caused by money worries fell in 2014. That we’ve seen living costs, such as petrol and diesel prices decrease, coupled with an energy market which hasn’t raised prices this winter, is likely to have eased financial pressures for some households, and allowed us to unwind a bit.

“However, money troubles haven’t gone away and cause more stress than any other factor, particularly for younger people. Worrying about how you’ll make ends meet each month can really take its toll on your mental health so we want to raise awareness of the actions people can take to improve their finances and hopefully alleviate some anxiety.”

2015 troubles

Although there are improvements in the number of people who are financially anxious, the New Year is set to continue to be a struggle for those who are concerned about their finances. Just over two thirds (69 per cent) of these believe the agony will only increase in 2015. Just under half (47 per cent) blame the rising cost of living as a key factor in making their stress worse. A further eight per cent are concerned by squeezes to their benefits, and six per cent are worried about their mortgage repayments, especially with speculation around possible interest rate rises in the next 12 months.

Stress Effects

Half (50 per cent) of UK adults are frequently or occasionally worried about their finances. Women feel the strain the most with 57 per cent saying they worry about money compared to 43 per cent of men. Again, the youngsters suffer more than the older demographic, with two thirds (66 per cent) of 18 to 24 year olds stating they frequently or occasionally worry about the state of their finances, compared to just under a third (29 per cent) of those aged 65 or over. To make matters worse, three-fifths (59 per cent) of UK adults who are worried about their money believe other areas of their lives are affected as a result, with their wellbeing being the main concern. A third (33 per cent) say their financial anxiety affects their health – a slight increase from the 31 per cent who said the same last year. Just under a quarter (23 per cent) admit their relationship with their partner or spouse has been affected, while another 23 per cent state that another area of their life has been affected.

Decreasing debt mountain

There is good news in terms of the nation’s debt mountain, however. Although just over a third (36 per cent) state that they are currently in debt, there has been a gradual decrease from previous years. Last year, 38 per cent of UK adults were in debt, and in 2012 two-fifths (40 per cent) were in the red. Furthermore, the outlook for those who currently owe money is bright, as 37 per cent of UK adults think they will be able to clear some type of debt completely within the next five years.A quarter (24 per cent) think they’ll be able to pay off their credit card, while 14 per cent believe they will clear their personal loan, and 11 per cent expect to settle their overdraft. However, the financial struggle is set to continue for the 15 per cent who do not expect to clear any type of debt by 2020.

Dan Plant, continued: “Make doing a full bills makeover New Year’s resolution. The beginning of a new year is the perfect time to detox your finances, and often small changes, like, making sure you’re not overpaying for things like car and home insurance and energy can mount up to sizeable savings.

“If you can’t see a light at the end of the tunnel and feel as though you’re stuck in a debt spiral, don’t struggle on your own. Speak to a free one debt charity such as StepChange, National Debtline or the CAB – there is help ready and willing.”