The UK is facing a financial wellbeing crisis. New research by the Building Societies Association BSA), as part of UK Savings Week, reveals the ongoing cost-of-living pressures are not just hitting people in their wallets, but are affecting their health, work and daily lives.
Almost a quarter (22%) of UK workers say that money worries have adversely impacted their performance at work. Alarmingly, one in five (19%) admitted they needed to take time off work due to illness caused by financial concerns.
Young adults are being hit the hardest. Among workers aged between 18-24 years, one in every three (33%) said their money worries have made them ill and forced them to take time off work.
A nation living on the financial edge
A UK Savings Week report found that having a savings buffer not only improves financial resilience, it can also improve overall wellbeing and life satisfaction. The report revealed how a regular savings habit can help us feel more optimistic about the future, improve our ability to relax and sleep better at night, and be more satisfied with our life generally.
Yet many people in the UK are living without this buffer. Over a quarter of UK adults (27%) have less than £1,000 in savings, with a worrying 12% having no savings at all.
One in five adults (21%) couldn’t cover a £300 unexpected expense, a problem that particularly affects younger people - 36% for those under 24 year olds - and those with less than £1,000 saved (44%).
One in three adults (30%) wouldn’t be able to live off their savings for more than one month if they lost their income. This rises to almost half (44%) for those aged between 35-44 years – often parents of young children.
Even small increases in savings can improve financial resilience. Almost two thirds (60%) of those with less than £1,000 in savings confess that they would not be able to get by for more than one month if they lost their income. But for those with savings between £1,000-£9,999 this drops dramatically to one in three (33%).
Changing habits is possible
Encouragingly, the research revealed some positive signs that behaviour change which could help individuals’ build stronger financial resilience and wellbeing is a real possibility.
Half of UK adults (52%) consider themselves a Saver, with just one in five (22%) saying they are Spenders*. As many habits are formed in childhood, it was unsurprising to see that around two-thirds (66%) of those who were Savers as children are still Savers in their adult life. However, it’s encouraging that almost half (47%) of childhood Spenders have now changed course and identify themselves as Savers.
Savers are far more likely to put money away regularly. Two thirds (67%) of Savers save every month, compared to just 15% of Spenders. On average, Savers hold nearly double the amount of savings compared to Spenders (£34,353 vs. £17,693).
When asked about how much people save, most confessed that they could do more. The majority (81%) say they could save an extra £10 a month if they needed or wanted to, including nearly half (47%) of those who currently have no savings at all.
Younger people are both more optimistic and more open about money. Among 25-34 year olds, 89% believe they could save more each month. And two-thirds (68%) of this age group say they find it helpful talk about money with their family and friends. This openness declines with age, with just one in four (23%) of those aged over 65 feeling the same.
Shirley Ballas, Strictly Come Dancing Head Judge, is a supporter of UK Savings Week and commented:
“I’ve seen first-hand how life can throw unexpected challenges your way, and how important it is to build resilience to face them.
“This research shows just how deeply money worries can affect our wellbeing. But it’s also encouraging to see that many people who aren’t currently saving feel they could start building a regular savings habit.
“Saving, a bit like dancing, can feel intimidating at first. Taking that first step is often the hardest part. Progress might feel slow, but with practice, it becomes more natural and eventually part of your routine.
“Having some money set aside for when life takes an unexpected turn can make all the difference. It gives you confidence, freedom, and peace of mind. That’s why I’m proud to support UK Savings Week.”
Andrew Gall, Head of Savings and Economics at the Building Societies Association, commented:
“This research lays bare the human cost of financial insecurity and how money worries are quite literally making people ill.
“But the findings also highlight the benefits of saving. We know that those who are able to save, even small amounts, have reduced anxiety and are more able to deal with life’s shocks. And for people fortunate to have more substantial savings pots, having savings to draw upon can open up new opportunities.
“UK Savings Week encourages everyone to build better savings habits, whatever their starting point. Whether it’s £1 or £100, every pound put into savings helps to build peace of mind, long-term resilience, and better mental wellbeing.
“UK Savings Week brings together all types of organisation, from savings providers to charities to businesses, to get people to look again at their finances and take the next step to building their resilience and make the most of their money.”
