People still cautious about their finances despite wage increases and low inflation

New research to support the launch of Sainsbury’s Bank’s first ever ‘Family Finance Report’ reveals that, despite the emergence of green economic shoots, the majority of people in the UK are not feeling any better or worse about their finances this year than in 2015.

The new report looks at some of the biggest financial challenges facing families, and uses a newly assembled panel of experienced personal finance experts to offer tips and guidance on how to overcome those challenges.

Despite people’s wages increasing by around 2% in the past 12 months and consumer price inflation averaging 0.02% last year, the report reveals that 47% claim they feel no better about their finances this year than they did in 2015. Some 26% feel less confident about them, compared to 24% who feel more up-beat. 

Only 19% of women believe they will be better off this year than in 2015, with 28% believing they will be worse off.  The corresponding figures for men are 29% and 25%.    

In total, 73% of us admit to having some financial concerns and for 26% of people, their biggest money worry is the cost of living, and this is followed by 13% who cited changes to their family’s income. Nearly one in ten (9%) said their main financial concern was not receiving a good enough return on their savings.

Simon Ranson, head of banking at Sainsbury’s Bank said: “Our research shows that people’s hourly earnings have gone up 3.9% over five years. And with inflation now going down, we should be starting to feel better off. But many people are still concerned about their family finances however and are shopping around to secure the best available deals. 

“The good news is that our findings reveal that many people are looking to save money by refinancing their borrowings, and also find a new home for some of their savings and investments to receive a better return.”

On a regional basis, 40% of Londoners feel more confident about their finances this year compared to 2015, followed by 32% of adults in Yorkshire and Humberside. Only 14% of people in Wales feel more confident - the lowest of any part of the UK - followed by 17% in Scotland.

The group which has grown most in confidence is the are 18 – 34 year olds (40%) while those aged 55 and over are most likely to feel less confident than 12 months ago (59%).

Despite the publicity given to the prospect of interest rates rising, just 5% of people said that this was their main concern, and the same percentage said this about the cost of housing in the UK. Similarly, one in twenty people (5%) said that their biggest financial worry was their children’s financial future.

The bank’s findings reveal that in total, 20% of people are looking to move one or more borrowings to a better deal, and 65% are planning to switch savings for a higher interest rate.

Similarly, to help save money, 65% are planning to shop around to try and find a better quote for one or more insurance products, and 39% of people are going to do this for their gas and electricity supplies.  Some 37% are planning to do this with their phones and broadband.

Furthermore, 12.6 million people – one in four of us – plan to make more use of reward points and discount vouchers this year to help make their money go further.

The findings from the research can be found at sainsburysbank.co.uk/familyfinance