At a glance
- Financial wellbeing is not only important for us as individuals – it also strengthens our communities and the national economy.
- There are still huge disparities in our attitudes towards money and relative wealth, depending on where we live in the UK.
- Education is the key driver to feeling confident and financially resilient. Financial advisers can help you feel in control of your money and create a financially healthy nation.
Why financial health should be our ethical and financial priority
What is financial wellbeing? It’s about knowing that you can pay the bills, manage your debts, deal with the unexpected and stay on track for your long-term goals. When we feel in control of our money, we tend to be happier, our communities are healthier, businesses are more prosperous and the national economy thrives.
How financially healthy are we?
According to the latest research from the Money and Pensions Service (MaPS), a quarter of the UK’s adult population has less than £100 in savings1.
Perhaps more worryingly, the survey of 3,000 adults, carried out for Talk Money Week in November 2022, reports that around a quarter of adults live with no financial safety net except credit. Four out of ten of us use credit. These are just some of the reasons why MaPS, in partnership with organisations across a range of sectors, has made a ten year commitment to improve the financial wellbeing of people in the UK.
We have a lifelong relationship with money. That’s why financial wellbeing needs to be at the heart of the conversation. Financial advice has a key role to play in helping people to understand how to manage their money and make informed choices.
When more of us feel financially confident and capable, the healthier the nation will be. Positive changes to products, services and regulations in financial services are already helping to build personal confidence and financial skills in the wider population.
Financial wellbeing for individuals
Nearly half of people in the UK (44%) say they would be in fitter shape financially if they were better taught how to manage their budgets and bills, according to a 2022 survey by the Centre for Social Justice2. In May 2023, the MaPS reported that less than half the UK’s children had been taught basic money skills, either at home or at school3.
A large number of children grow up without knowing how to budget or save, while many adults aren’t even confident talking about money to family and friends. The scale of the problem is clear in the 2022 MaPS report. It can be hard to admit that you’re struggling financially, or that you don’t understand the basics, so it’s not surprising as many as four in five of us struggle to talk about money.
According to the 2022 Financial Lives survey by the Financial Conduct Authority, almost one in five of UK adults don’t feel confident that they fully understand, or could compare, financial products. That figure rises to almost two thirds (61%) if they are in financial difficulties4.
Why financial education is the key
Fixing this requires action by all parts of society – and you’re almost never too young to start learning about money. Evidence shows that children have developed attitudes about money by the age of seven, yet ten years ago, financial education wasn’t even on the school curriculum. Since 2014, financial education has been taught in secondary schools but learning the basics and understanding how to manage money wisely can start in primary schools.
St. James’s Place Financial advisers share money management skills with young people in schools and colleges. Since 2015, we’ve provided a financial education programme to nearly 40,000 young people.
It’s important that by the time children leave home, they can feel confident about budgeting, avoiding debt and seeing money as positive and empowering, not something to ignore or be frightened of. A little financial education can go a long way.
The regional perspective
Where you live has a marked effect on how financially confident or resilient you feel – and how wealthy you think you are. There are huge regional disparities, primarily between Northern and Southern England that affect the way we feel about our finances.
According to SJP’s 2022 Financial Health Index – our nationwide analysis of financial wellbeing – the gap between North and South has widened further. Those living in the South East are now more than four times more financially healthy than those living in the North East and more than twice as many have a financial plan in place5.
However, the higher cost of living in the South East meant that even those who were relatively wealthy had a lower perception of their wealth. And right across the UK, only 39% of UK adults said that they felt financially comfortable.
There are many contributing factors to the gap between North and South, but the solution is universal. Education unlocks empowerment. If you’re an employer, you can help your workforce feel more financially confident through education. Many larger, city based companies have built this into their employee wellbeing programmes already – but it’s often those who work for smaller companies who are more financially vulnerable and need more help.
The financial state of the nation
In February 2023, the ONS reported that one quarter of the UK’s population felt financially vulnerable, with a third struggling to pay the mortgage6. And we take our money worries to work. One in ten British workers called in sick due to financial worries, while almost one in five say that these worries affected their productivity7 Managing debt can be mentally draining, not to mention the time spent ‘on hold’ to banks which can be frustrating and directly impact our productivity.
One reason for this impact on our mental health is not knowing who to ask or where to turn for financial advice.
The more confident the general population is, the more financially healthy the country is. “A more skilled and financially attuned workforce will buy and spend responsibly,” says Harriet Shepherd, Financial Wellbeing Manager at SJP. “There’s less likelihood of going into debt.” By tackling the problem head-on, we can improve the financial health of our nation – and our society.
The wider effects on wellbeing
Where does a sense of financial wellbeing fit into people’s general wellbeing? Financial wellbeing is about feeling confident and in control. That could mean having the confidence to invest, or the confidence to deal with debt – or somewhere in between.
Money and mental health are closely linked. When worrying about money, people find that their mood, focus and sleep patterns are impacted as stress takes its toll. If you’re already living with a pre-existing mental health condition you may be less able to plan, make decisions or communicate, making it even more difficult to manage money. The strain of worrying about finances can push those experiencing a mental illness to tip into crisis. A financial adviser can help to guide you through these challenging times, and often talking openly to someone who is one step removed from the situation can be an enormous relief.
Practical, sensitive financial advice can help put you back on track, and back in control.
How you can help
When it comes to spotting the sign of financial stress, we can all look out for our friends and family. If you see signs that someone might be struggling with money and mental health, talk to them. Talking about debt can save a life. If you’re experiencing poor mental health and financial issues, you can always find free, impartial advice at mentalhealthandmoneyadvice.org.
Whatever path any of us choose in life, money often makes it possible. Our long-term goal is to help more people feel financially confident, and to build a financially healthy society for the future.
1Money and Pensions Service, November 2022
2The Centre for Social Justice and Lowell, January 2022 (Poll carried out by Opinium, and based on a sample size of 4,000 people)
3Money and Pensions Service, June 2023
4Financial Lives Survey May 2022, FCA (published July 2023)
5UK Financial Health Index, St. James’s Place and the Centre for Economics and Business Research, 2022 (Total sample size 1,000)
6Office for National Statistics (February 2023)
7Wellbeing and Productivity in the Workplace, Aegon and the Centre for Economics and Business Research, November 2021 (Based on a sample size of 2,000 employees)
SJP Approved 27/09/2023