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Cost of living rise forces consumers to delay major life decisions

20/03/2023
RETIREMENT
  • Decisions such as buying a home, getting married, starting a family and taking retirement are being put on hold due to stretched finances
  • 23m describe their financial situation as “struggling” – 7m more than 12 months earlier
  • 21m adults say they are worried about money 

Research from investment, protection and retirement specialist LV= shows how financial worries are leading to people delaying major life decisions such as getting married, buying a first home, starting a family or changing careers.

The LV= Wealth and Wellbeing Research Programme* - a quarterly survey of 4,000 UK adults – highlights how millions of people are struggling with heating bills and have needed mental health support in the past 12 months. 

Money worries are leading to consumers switching to cheaper brands, taking fewer holidays, cancelling subscriptions and taking on extra debt to make ends meet. 

Some 23m (42%) describe their financial situation as struggling – 13 percentage points higher than 12 months earlier (29%/15m). Women (49%) are more likely than men (35%) to say they are struggling while those aged 35-54 are the age group most likely to be so.

Life decisions are put on hold

The research found that the rise in the cost of living is forcing people to delay major life events. Nearly one in ten (9%/5m) UK adults say they want to have a child in the next 12 months but don’t think they can afford to. A similar number (9%/5m) want to get married but say they cannot afford to.

Workers are also reluctant to make major career changes. One in five workers (20%/7m) say they want to change career in the next 12 months but don’t think they can afford to. Some 17% of workers (5m) say they would like to start their own business whilst similar numbers say they would like to retire in the next 12 months but don’t think they can afford to.

Other decisions being put on hold by UK adults include buying a car (13%), or a first home (11%).

How people plan to cope with rising cost of living 

Consumers are taking a series of measures to manage their finances. Many are cutting back on leisure activities and holidays while others say they will take on extra debt. 

  • 33%  (18m) are buying cheaper brands
  • 31% (16m) are saving less
  • 24% (13m) are having fewer holidays or days out
  • 22% (12m) are dipping into their savings
  • 17% (9m) are cancelling subscriptions
  • 7% (4m) are taking extra jobs/doing overtime
  • 6% (3m) are borrowing on credit cards and taking additional loans

Money worries leave people stressed and anxious

Money worries are affecting the UK’s mental health and 40% (21m) of UK adults say they are worried about money, compared to 29% (15m) 12 months ago. 

Nearly half of UK adults (46%/25m) say they are stressed or anxious – higher than 12 months earlier (43%/23m). Rising numbers say they have sought face-to-face mental health support with 9% (5m) seeking support compared to 7% (4m) a year earlier.

Women (57%) are more likely than men (34%) to say they feel stressed or anxious, while those with a household income of less than £25,000pa are much more likely to be stressed than households with an income over £100,000 (50% vs 31%).

Increasing numbers are struggling to pay for heating and food

Rising energy bills are a huge worry for UK consumers (53%), particularly for those with household incomes below £25,000 (63%). Some 17% (9m) UK adults say they are struggling to pay for heating – a big rise on six months earlier (10%/5m) and nearly one in four (24%) of parents with a child aged 0-10 say they are struggling to pay for heating.

Some 15% (8m) of UK adults say they are struggling to pay for food compared to 8% (4m) six months previously. About one in four (26%) of parents with a child aged 0-10 say they are struggling to pay for food.

“The LV= Wealth and Wellbeing Research Programme provides a long-term view of the state of the nation’s personal finances. 

“Our latest quarterly survey shows that the rise in the cost of living is taking its toll on the finances of millions of people. Every quarter over the past year we have seen an increase in the number of people who are struggling financially and many are feeling stressed and anxious. 

“The huge rise in the cost of living is a huge worry for millions of people and our research shows many are dipping into savings and taking on extra debt to make ends meet. It’s also affecting people in other areas of their lives and many are now more reluctant to make major life decisions such as buying a first home or starting a family.”

Clive BoltonManaging Director of Protection, Savings & Retirement

Notes to editors

*LV= surveyed 4,000 nationally representative UK adults via an online omnibus conducted by Opinium in December 2022.
UK population stats from ONS. Total UK adult population is 53.2m UK adults (aged 18+).