When it comes to financial health, it seems the Government’s much-vaunted ‘levelling up’ campaign still has a lot of work do to.
A clear north-south divide has emerged across the UK – with Shropshire and the West Midlands sitting in the bottom half of the league table.
The findings come in the first UK Financial Health Index from wealth management group St. James’s Place, developed in conjunction with the Centre of Economics and Business Research.
It analysed how wealth is distributed across the nation and where financial health is strongest, broken down into three distinct pillars: Wealth, Wealth Drivers, and Perceived Financial Wellbeing.
The Index found that more than half of people feel they are not financially comfortable, and 78% claim they do not consider themselves wealthy.
Fewer than two in five have a financial plan in place for future, according to the research.
The South-East is the region with the strongest overall financial health, with a score of 76 out of a possible 100. The North East is the lowest ranked region, attaining a score of only 19. Here in the West Midlands, the figure comes out at 42.
The Index also reveals that those who felt financially vulnerable believed it would take a doubling of their current wealth to make them financially resilient – while for those that do not feel wealthy think it would take ten times their current financial position change this.
So what are the key factors driving this situation?
A third of people reported rising property prices as the main reason behind their increase in wealth, ranking just behind the leading driver, pay rises. Lifestyle changes enabling greater savings came in third.
The survey also sought to identify factors preventing people from seeing gains in their wealth by enquiring on the key barriers behind wealth growth – 44% cited the cost of living as the key impediment behind wealth growth.
Recent ONS inflation figures showed cost of living has surged at its fastest pace in almost 10 years, and with inflation expecting to continue rising over the coming months, it’s one of the reasons why the Bank of England reacted just before Christmas to raise interest rates.
According to the survey, a little over a third of people have a financial plan in place for future.
Alex Loydon, director of partner engagement and consultancy at St. James’s Place, said: “Financial health captures much more than just our total wealth – it assesses the full picture of how comfortable and resilient we feel to handle pressures on our finances.
“The UK Financial Health Index shows that not only is wealth unevenly spread around the UK, but in some areas, there is a clear mismatch between the reality of people’s wealth and their own perception of being wealthy, meaning that people across all regions are experiencing poor financial health in one way or another.
“Clearly this is a complex picture and there are many factors that are impacting financial wellbeing across the country, and some of these are well outside our individual control while others require collective action.
“However, with the cost of living rising and greater strains on our money, it’s more important than ever to engage with finances and to have a plan in place. The research shows the impact that can have on people feeling much more confident about their future security.”
SBLTV Knowledge has been funded by Shropshire Council’s Economic Recovery Programme, working in association with The Marches Growth Hub Shropshire. The programme was set up to meet local economic need following the Covid-19 pandemic and deliver Shropshire-wide business outcomes.
© 2022|SBLTV Knowledge | Privacy Policy
Follow us on social media:
