- One in three (36%) say thinking about their financial situation makes them feel worried
- Those who have lost income due to the pandemic are more likely to have lost confidence in their ability to manage money
- MoneyHelper launches new tools for Talk Money Week, 8-12 November, to reduce money worries and build financial confidence
One in two adults (45%) in the UK don’t feel confident in managing their money day to day, according to new research from the Money and Pensions Service’s (MaPS) Financial Wellbeing Survey 20211.
The flagship research of more than 10,000 adults in the UK found that 19 million2 people (36%) feel worried when thinking about their financial situation. Those who are most likely to feel worried when thinking about money are young people aged 18 to 34 years (50%), parents (48%) and private renters (51%).
With half of people in the UK currently lacking the confidence to take control of their finances and many likely to avoid thinking about money due to related anxieties, it’s no wonder such a large number of people don’t feel equipped to tackle their money worries head-on.
These findings have been published for Talk Money Week, the Money and Pensions Service’s annual campaign that encourages people to open up about their finances and aims to break the taboo of talking about money worries, to increase financial confidence and wellbeing across the country.
Talking about finances has been shown to help people make better informed choices, feel less stressed or anxious and more in control, have stronger personal relationships, and help their children form good lifetime money habits.
MaPS’ latest research also shines a light on the impact the pandemic has had on working age people’s confidence when it comes to making sound money choices. In 2018, the MaPS Financial Wellbeing Survey found that 57% of those of working age3 felt ‘very confident’ managing their personal finances, compared to just 48% in 2021, demonstrating a significant drop in financial confidence following the pandemic.
The research clearly demonstrates that those whose household income has decreased and are still earning less than they were before the pandemic are less likely to feel ‘very confident’ about managing their money (38%) compared to those who’ve experienced little to no change in their income (54%) or an increase in income (57%) since the start of the pandemic.
Sarah Porretta, Propositions, Insights and External Engagement Director at the Money and Pensions Service said:
“Given the pandemic has led to many people worrying about job security or what happens after furlough, it’s not surprising that many have lost confidence in their own ability to manage money, in particular those entering the job market for the first time.
“It’s been a tough time for so many and the knock-on effects are wide-ranging, but if this is you, you are not alone. We recognise that people may need some extra help to get back on their feet, and that’s where MoneyHelper’s free, online tools and guides to everyday money considerations, such as budgeting, paying bills, or finding affordable credit can really help.
“For those who are struggling financially, money worries can be particularity challenging at this time of year, coming up to the festive period when many of us hope to socialise more frequently or feel under pressure to spend more on gifts, and when the costs of heating your home may rise.
“Our research shows that one of the quickest and easiest ways to feel better about money, and boost your confidence, is to talk to someone who you trust. Whether you reach out to a family member, friend or a money guidance professional, talking about money is a positive way to ease the burden.”
Of those who take up free debt advice, three quarters feel more in control after getting help and 63% will reduce or clear their debts within 3-6 months after having received advice4.
Minister for Pensions and Financial Inclusion, Guy Opperman, said:
“As we build back better and fairer from the pandemic, we’re committed to ensuring people have the support they need to stay on top of their finances and feel confident with money.
“The first step to better financial wellbeing is talking about money and I would encourage anyone concerned about their finances to take advantage of the free and impartial government services on offer from MoneyHelper and the Money and Pensions Service.”
Bron Davies, a 25-year-old project manager from Cardiff, worked as a theatre producer but was made redundant because of the pandemic. She found a new job, but it pays £5,000 less per year.
“I continued to spend like I was still on that same amount. Covid hit, lockdown happened, and I kept thinking to myself ‘I can buy this, I can treat myself to that’ and then I found myself in a position where I wasn’t saving. All of my future goals of maybe owning a house one day, maybe going on a big holiday, that sort of stuff was suddenly getting further and further away. I found myself in a situation that felt quite hopeless, and I was disappointed in myself.
“I used MoneyHelper’s Couch to Financial Fitness tool to get back on track, and now I’m feeling like the person I thought I was with money – someone who’s ‘on it’, quite savvy and knows ways of saving – so now I’m feeling a whole lot better.”
To equip more people with the tools they need to recover financially from the pandemic, build stronger savings habits and make the most of their money and pensions, MoneyHelper, a service provided by the Money and Pensions Service, has launched a new module as part of its online Couch to Financial Fitness programme.
The newest module takes people through simple online activities to help them open up about their finances and have positive money conversations with children. Users can also take this opportunity to build their own financial confidence, by using the step-by-step programme to work through getting on top of bills, budgeting, saving and even planning for retirement.
The MoneyHelper website also offers a number of easy-to-use guides and tools such as Money Navigator to help people deal with the financial impact of the pandemic and avoid financial issues worsening in the future.
For those struggling with indebtedness, MoneyHelper’s money experts offer free, impartial and confidential debt advice over the phone, online and via WhatsApp, and urge people to get in touch right away for support and guidance by calling 0800 138 7777.
Government-backed MoneyHelper is a single destination providing free money and pensions guidance over the phone, online and face-to-face. It also signposts people to expert and free-of-charge debt advice, if they need it. It brings together the services previously provided by the Money Advice Service, The Pensions Advisory Service and Pension Wise.
For more information, and to try Couch to Financial Fitness and MoneyHelper’s online guides and tools visit www.moneyhelper.org.uk or for personalised guidance about your money and pensions call 0800 138 7777.
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Notes to editors
- The Financial Wellbeing Survey is a nationally representative survey of 10,306 adults living in the UK. It consists of online and postal interviews during July to September 2021. The research was conducted for the Money & Pensions Service by Critical Research. For Talk Money Week MaPS is sharing early insights from the Survey, which was recently concluded.
Data is weighted to be representative of the UK 18+ population by region/devolved nation, age, gender, Indices of Multiple Deprivation, housing tenure, urbanity, ethnicity, working status and internet usage.
- Population figures are calculated using a UK adult population of approximately 53 million, based on ONS mid-year population estimates.
- 2018 working age defined as 18-64, 2021 working age defined as 18-65. Different definitions due to change in State Pension Age (SPA).
- 2018-19 outcome evaluation of debt advice funded by Money and Pensions Service (2019).
About Talk Money Week
Talk Money Week is an annual public awareness campaign, run by the Money and Pensions Service, to get the nation having conversations about money.
Talking about finances has been shown to help people make better informed and less risky financial decisions, feel less stressed or anxious and more in control, have stronger personal relationships, and help their children form good lifetime money habits. Talk Money Week in 2021 will take place from 8 to 12 November.
About the Money and Pensions Service
The Money and Pensions Service (MaPS) is here to ensure every person feels more in control of their finances throughout their lives: from pocket money to pensions. When they are, communities are healthier, businesses are more prosperous, the economy benefits and individuals feel better off. MaPS delivers free and impartial money and pensions guidance to the public through MoneyHelper, which recently brought together legacy services the Money Advice Service, The Pensions Advisory Service and Pension Wise.
MaPS is working to make sure the whole of the UK understands that financial, physical and mental health are all deeply connected. MaPS’ role is to connect organisations with the shared purpose of achieving the five goals set out in the UK Strategy for Financial Wellbeing.
MaPS supports innovation so that everyone can use the most effective methods to help people feel more in control of their money, targeted to those most in need and inclusive of people from all backgrounds. MaPS is an arm’s-length body sponsored by the Department for Work and Pensions (DWP).