THE GREAT FINANCIAL DIVIDE

ALMOST HALF (43 PER CENT) OF BRITS FEEL OVERWHELMED BY THEIR DAILY FINANCIAL DECISION MAKING, BUT FINANCIAL STRESS DROPS AFTER YOUR 50TH BIRTHDAY

ALMOST HALF (43 PER CENT) OF BRITS FEEL OVERWHELMED BY THEIR DAILY FINANCIAL DECISION MAKING, BUT FINANCIAL STRESS DROPS AFTER YOUR 50TH BIRTHDAY

Published: 12/11/2021
  • New research from comparethemarket.com shows 43 per cent of Brits feel overwhelmed by daily financial decisions 
  • A study of 2,000 adults in the UK found that putting their head in the sand about their finances causes 40 per cent to feel nervous 
  • A reported 85% of 18-year-olds feel stressed by their finances  
  • The study shows the majority feel less stressed about money management after their 50th birthday 
  • comparethemarket.com has launched the Good Things hub to offer people more ways to manage their money than ever before  

12 November 2021, London: Millions of Brits (43 per cent) are overwhelmed by the volume of financial decisions they make on a daily basis, with over half (53 per cent) of UK adults choosing to put off decision making as a way of coping.  
 
While the UK’s collective head-in-the-sand approach may create short-term respite, doing so leaves over half (54 per cent) stressed out, 40 per cent feeling nervous, and causes upset to nearly one in three people (32 per cent). In addition, 15 per cent admitted to typically feeling intimidated when managing their finances. 
 
But what’s causing the UK’s financial anxiety and who is feeling the pinch…? 
 
The study of 2,000 people was conducted to support comparethemarket.com’s Good Things hub, which houses tools to help people better manage their money, and highlighted that for the majority of Brits, their outgoings now include items such as subscription services which didn’t readily exist ten years ago.  It can all add to the overload.  
 
Today, the UK’s average outgoings include:  

  1. TV streaming services (32 per cent)  
  2. Wifi (22 per cent)  
  3. Delivery subscription services – e.g. fashion, home and lifestyle providers (21 per cent)  
  4. Pet costs such as food and vet bills (18 per cent)  
  5. Insurance e.g. life and car (18 per cent)  

Financial guru, Emmanuel Asuquo** comments: 

“It can be easy to find yourself burying your head in the sand when it comes to money, particularly if you’re feeling worried about it - but hiding from problems doesn’t make them go away and, in most cases, it can make them much worse. 
 
Although it’s easy to feel anxious about your finances, it’s important to try and stay on top of money management and find some support. Helpful tools such as those on the Good Things hub on comparethemarket.com are a great place to start. The information is easy to digest and will keep you organised and in control.” 

Talking ‘bout my generation:

A huge 85 per cent of today’s 18-year-olds feel stressed by their finances. However, that intense feeling of being financially overwhelmed reduces over the decades:

Percentage of people who feel financially overwhelmed:

  • Aged 19 – 29: 72 per cent
  • Aged 30 – 39: 59 per cent
  • Aged 40 – 49: 42 per cent
  • Aged 50 – 59: 31 per cent
  • Aged 60+: 25 per cent

Money management concerns shift at different life stages:

Monthly outgoings peak for people in their thirties at £1,173 and go towards fulfilling financial decisions such as putting money aside for children’s future (33 per cent), investing money (30 per cent), eating out (46 per cent) and paying for subscriptions (40 per cent).

While those in their forties may not have the highest outgoings, they do have the greatest number of financial choices to make at nearly ten monthly decisions, and therefore have more money matters to juggle.

There is a clear divide when it comes to feelings of financial anxiety, as money management becomes less stressful after 50. Indicating that perhaps as children leave the nest and outgoings reduce, so too does the time and headspace dedicated to money, leaving more space and time for leisure.

Instead, over fifties spend more time on money matters relating to leisure or the future, including putting aside savings (67 per cent), deciding how much to keep as disposable income (55 percent) and saving for a holiday (52 per cent).

For those in their sixties, the average outgoings are over half (£685) the amount that people in their thirties spend (£1173). At 54 per cent, more than half of those aged over 60 do not feel very stressed by the financial decisions on their plate.

Ursula Gibbs, director at comparethemarket.com, said:

“As we get older, there are more decisions to make about managing money and this tends to peak in our 40s. Therefore, as our lives get more complicated, typically with the introduction of children and mortgages, so can our finances, which many admit to finding overwhelming. 
 
For today’s young adults, entering the world of money management could feel overwhelming. comparethemarket.com is now offering the nation more ways to manage their money than ever before helping to support everyone with their financial decision making.” 

EMMANUEL’S TOP TIPS FOR GOOD MONEY MANAGEMENT: 

  1. Don’t put your head in the sand – Money management can be overwhelming and stressful, especially if you’re new to it or are facing a change in circumstance. However, the worst thing you can do is put your head in the sand if you’re feeling stressed. Instead take action and get on top of your finances by using tools such as those on comparethemarket.com which automate renewals and help you find great deals. 
  2. Mindset - before you start your money management journey, you have to work your money mindset. The first step is identifying your “why”. Your Why is something so crucial that you will not give up, even when things get hard. For example, to support my family or retire at age 50.  
  3. Needs vs Wants - The next step is to look at your outgoings and identify the things you are spending money on and if they are needs (life essentials such as groceries, rent/mortgage, water, utilities etc.) or wants (life’s luxuries such as eating out, holidays, tv subscriptions). A good way to do this is to list all your outgoings and then put them either in the need column or the want column. When you total the need column, you will know “how much it costs to be you”. Then you decide what outgoings from the want column you’re going to keep. 
  4. Accounts Method - People make a big mistake in having all their money go in and out of one account. A good way to manage your money is to split it into three accounts. The first account is for your fixed cost. These would typically be your direct debits (bill payments). The second account would be your spending account, and you would pay for travel, lunch at work, going out etc. Your last account is a savings account. You will build this account up with your leftover money after contributing to your fixed cost and spending account.  
  5. Emergency Fund - Now that you have your money in order, the next thing to do is build up an emergency fund which should typically be a minimum of three months of your monthly outgoings.  

To find out more ways to manage your money and stop the urge to put your head in the sand, visit www.comparethemarket.com  

-ENDS-

For further information please contact [email protected] / Gemma Deering on 07880 300173. 

*Survey of 2,000 adults conducted by OnePoll for comparethemarket.com in September 2021. 
 
**Emmanuel Asuquo is a Financial Adviser & Founder of Noir Excel & The Eman Effect. He works with individuals and business owners to help them plan and prepare for their financial future.  Recently Emmanuel joined Channel 4 show Secret Spenders, where he helped cash-strapped families who overspend, with a financial makeover. Emmanuel has also provided his skills and expertise on Channel 4’s Save Well Spend Better, BBC1 programme’s Your Money, Your Life, Watchdog, Morning Live and Rip Off Britain, alongside ITV’s This Morning.  
 
About comparethemarket.com 

comparethemarket.com was launched in 2006 and has grown rapidly over the past fifteen years to become one of the UK’s leading price comparison websites. 
 
comparethemarket.com provides customers with an easy way to make the right choice for them on a wide range of products including motor, home, life, travel and pet insurance as well as utilities and money products such as credit cards and loans. 
 
comparethemarket.com actively works with its brand partners to help provide great services to customers. 
 
comparethemarket.com is a trading name of Compare The Market Limited. Registered in England No. 10636682. Registered Office: Pegasus House, Bakewell Road, Orton Southgate, Peterborough, PE2 6YS. Compare The Market Limited is authorised and regulated by the Financial Conduct Authority for insurance distribution (Firm Reference Number: 778488). Energy and Digital products are not regulated by the FCA.