Although UK household wealth has fallen on average by £35,000 over the past year, having a financial plan in place can boost confidence, research from St James's Place has shown.
The research, conducted by Opinium among 6,000 adults in October, found that over the past year British household wealth has fallen by 23 per cent, from £147,762 to £113,154.
London (53 per cent), Scotland (50 per cent) and Wales (13 per cent) suffered the biggest hit to overall household wealth.
In order to combat this, people have resorted to shopping at cheaper supermarkets (41 per cent), not buying clothes they consider non-essential (40 per cent) and switching utility providers (20 per cent).
Additionally, one in three (30 per cent) are putting less money into savings, or stopping saving altogether.
But having a plan in place boosts people's confidence, with the research finding three quarters (76 per cent) of those with a plan remain confident in their financial position.
Alexandra Loydon, director of engagement and consultancy at SJP, said: “The economic circumstances in the last 12 months have hit households, with average UK wealth suffering a sharp fall.
“This not only impacts everyday finances, but also long-term savings, with a substantial number of people now putting away less money for their future.
“Unfortunately, conditions are expected to remain challenging in 2024 which is worrying given the effect that the last year has already had on people’s finances.”
The power of a plan
Four in 10 (41 per cent) people have a financial plan, and those aged under 34 are more than twice as likely to have one (61 per cent) than those over 55 (27 per cent).
“When many factors are out of our control, it’s even more important to take control of the things we can have an impact on,” Loydon said.
“Having a plan in place, and if possible seeking advice, can help you grasp your financial situation and take action to improve it, both for the short and long term.”
Two-thirds (65 per cent) of those with a plan have seen their total wealth increase in the last decade - almost double the amount of those without a plan (38 per cent).
And the majority (67 per cent) of those with a plan in place have taken financial advice.
Those who received advice saw their wealth grow on average from £496,971 in 2022 to £516,599 in 2023, an increase of 4 per cent.
sonia.rach@ft.com
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