Britons’ wealth falls to 10-year low: One in three forced to raid savings last year, taking out average of £3,500
- More than half say they feel worse off financially now compared to last year
- Britons believe they will be £233 worse off on average per month due to inflation
- One in eight have been forced to take on more debt, borrowing £579 on average
One in three Britons has been forced to raid their savings in the last year, tapping their rainy day fund for an average of £3,506 as they struggle to keep up with rising living expenses.
Britons’ wealth has tumbled to a 10-year low not seen since the height of the pandemic according to insurance firm LifeSearch’s Health, Wealth & Happiness 2023 Index.
This has led to 52 per cent of Britons saying they felt worse off financially now than they did last year.
Savings raid: One in three Britons were forced to take an average of £3,500 last year from their savings to keep up with living expenses
Looking ahead to the next few months, Britons expected to be £233 worse off per month by the end of 2023 – or almost £2,800 on the year – due to inflation.
This was a slight improvement compared to last year’s survey, when people expected to be worse off by an average of £252 each month.
This year’s figure rose to £546 or more than £6,500 per year among Londoners.
On top of this, one in 12 people said they had to ask their families for money, with gifts averaging £401 per month.
One in eight people had been forced to take on more debt, either short-term or long -term, borrowing £579 on average.
The research was carried out by the Centre for Economics and Business Research on behalf of LifeSearch.
Saving money by turning down the heating, trimming kids’ pocket money and switching supermarkets
The survey also looked at where people were cutting back in order to try and save money.
It found that 55 per cent of people had been putting the heating on less, while one in four were using household appliances less frequently.
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A further one in four have switched supermarkets to try to save money, while one in five (21 per cent) have shopped in second-hand shops and budget stores.
We expect pressures to persist in the coming year, especially in terms of inflation and spending power.
Nina Skero, chief executive of the Centre for Economics and Business Research
Some 8 per cent said they had shared passwords for music and TV streaming services, rising to 13 per cent of under-35s This saved them £58 and £74 respectively each month.
Others were being forced to take more drastic measures. According to the LifeSearch study, 17 per cent of people had cut down on the number of hot meals they were having or changed the way they cooked, saving around £45 a month, while 3 per cent said they were using food banks and saving an average of £98 per month on food.
Some people had stopped giving their kids pocket money (2 per cent), saving around £73 a month, while 16 per cent had cut back on donations to charity.
| What have you done to save money over the last 12 months? | % people that have done this | Average saving per month |
|---|---|---|
| Put the heating on less at home | 55 per cent | £54 |
| Used appliances like dishwasher or washing machine less or at different times of the day | 25 per cent | £33 |
| Sold items I no longer need / want | 25 per cent | £82 |
| Switched the supermarket you shop in | 24 per cent | £62 |
| Shopped in second-hand / budget stores / charity shops | 21 per cent | £57 |
| Fewer hot meals a day / changed how we cook | 17 per cent | £45 |
| Stopped giving to charity / reduced how much I give to charity | 16 per cent | £31 |
| Shared passwords for TV / music streaming | 8 per cent | £58 |
| Use food banks / charities for assistance | 3 per cent | £98 |
| Stopped / reduced kids pocket money | 2 per cent | £73 |
| LifeSearch Health, Wealth and Happiness Index 2023 | ||
Happiness at rock bottom
The study found that people’s happiness is at a rock-bottom low not seen in over a decade.
One in four people reported they were less happy today compared to a year ago, while 32 per cent of Britons said their mental health and wellbeing had worsened.
One in three said that money and trying to survive financially was likely to have the biggest negative impact on their mental health in the year ahead.
Nina Skero, chief executive of the CEBR said: ‘The latest edition of the Health, Wealth and Happiness Index shows that 2022/23 was a tough period for households.
‘We expect pressures to persist in the coming year, especially in terms of inflation and spending power.’
Emma Walker, chief growth officer at LifeSearch added: ‘The cost-of-living crisis has dragged the Index back down close to pandemic levels again.
‘It may then be no surprise to find Britons’ wealth experienced the biggest falls in the last year, but our health has also dropped, including our mental health which has worsened for one in three of us in the last 12 months.’
