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Three key findings from our latest Wealth and Wellbeing research programme

04/01/2024

For the 14th edition of our leading research programme, we asked respondents to share how they feel about the upcoming festive season, their retirement plans, financial knowledge, and their level of debt. We explore the latest takeaways and how they can be used to support adviser conversations.

1. The LV= Wellness Tracker has plateaued at +17 as we head into the winter months

The LV= Wellness Tracker measures those who say they are comfortable against those who are struggling, ranging from -100 to +100 where a positive score indicates more respondents feel positive than negative about their finances. Whilst the latest Wellness Tracker stabilizing at +17 in line with economic data indicates a cautious optimism that the nation’s financial resilience is starting to improve, many groups continue to struggle.

Despite 77% of the mass affluent stating that they are comfortable managing the rising cost of living, a significant minority say they can only just afford their day-to-day costs, which may have an impact on their attitudes towards investing. This could be linked to the rise in mass affluent consumers that have stopped their pension contributions; almost a third (31%).

2. More than three quarters (77%) of women don’t know how to take money from their pension in a tax efficient way

According to our data, there is a notable disparity in the level of financial confidence and pension knowledge between men and women. On average, around 12% more women than men are worried about energy bills, everyday costs and the future.

As we delve further into our findings on this knowledge gap, our findings show that women are also at least 20% more likely to say they don’t know how to stay financially secure in retirement, and 77% don’t know how to access retirement funds in a tax efficient manner.

This presents an opportunity for advisers to suggest a blended solution that could ease their financial planning worries. The LV= Blended Solution offers a combination of a guaranteed income and secure capital, along with smoothed investments* for growth potential. This unique solution comes with more flexibility to help your clients plan for the long term, as they won't need to tie themselves down to a decision which isn't adaptable to their future financial needs.

3. 71% of the stretched middle don’t know how they will avoid running out of money in retirement

The ‘stretched middle’ refers to those aged 35-54 who are most likely to face strain on their finances due to starting families, paying for mortgages, or have ageing parents requiring care or support. This group is therefore most vulnerable to changes in the Bank of England interest rate and the impact of mortgage rate changes. Our data shows that these combined pressures appear to have a demonstrable impact on their financial and emotional wellbeing and also have led this generation to risking their future pension and savings to cover costs now.

Here you can view the full report for free, Wealth and Wellbeing Research Programme Edition 14.

Source: LV= Wealth and Wellbeing Research Programme, Edition 14

*This stock market related investment can rise and fall in value. This means clients are not certain to make a profit and your client could get back less than they invested.

Smoothing can be suspended at our discretion if either the underlying price is 80% or less of the averaged or 'smoothed' price, or in exceptional conditions. The fund will typically be valued on the underlying price, or at our discretion, the fund may be valued on a daily gradual averaged price until smoothing is reintroduced (except ISA which would be valued on the underlying price).