Money and Mind Report – Improving the UK’s financial health and wellbeing

Read the full report here: SPW Money and Mind Report 2020

This is our first year of tracking the UK’s financial wellbeing, which is an increasingly important element of life.

For us, financial wellbeing isn’t about having the most money, it’s about having enough money to enjoy the things in life that make you happy. It’s also about being in control, having financial freedom and prioritising what’s important to you.

We believe that financial wellbeing cannot be looked at in isolation. Having a good level of financial wellbeing and feeling confident about your finances underpins all the other elements of wellbeing -they go hand in hand.

The focus on raising awareness of mental health and general wellbeing has been increasingly apparent over the last couple of years. Like us, many businesses are placing mental health at the top of their wellbeing agendas.

The findings of our report get to the heart of what is important to the nation and shows the financial issues that keep them awake at night.

We can also reveal, for the first time, the Schroders Personal Wealth Financial Health Score. Developed in collaboration with behavioural economists from Lloyds Banking Group and Warwick Business School, it unveils the true state of the nation’s financial wellbeing.

The score takes into account financial health across four key areas: getting the basics right, managing borrowing, protecting against the unexpected and planning for the future.

Our belief is that by understanding these factors underpinning financial wellbeing better, the financial services industry can help clients improve their financial affairs by delivering relevant support at the right time.

The Money and Mind Report tells us that even with the countless challenges brought on by the Covid-19 pandemic, overall the average UK adult believes they are in a relatively stable position when it comes to paying bills and saving money.

This doesn’t equate to good financial wellbeing, however, with around half of UK adults confessing their finances bring on feelings of being stressed or overwhelmed.

The results of Schroders Personal Wealth’s Financial Health Score lay bare a contradiction between people feeling confident about their finances and the reality, which is that their finances are not in a great state of health.

Worryingly, this is almost solely down to the fact people are failing to plan for the future and put in place protection against the unexpected.

This report sets a challenge to the financial services industry and the Government to get individuals planning more carefully for their futures.

More needs to be done to encourage stronger engagement with long-term financial planning. We firmly believe this will improve wellbeing.

With such a turbulent year so far – and it’s likely there is more to come – there’s no doubt there are challenging times ahead.

The ever-present pension savings gap threatens what should be a comfortable and secure retirement and this is made even more urgent by the current economic outlook in the UK.

Ensuring consumers are engaged, seeking support from companies and charities and having open and informed conversations about their finances is crucial.

Financial wellbeing is something everyone can aim to achieve. Whether you engage with your finances on your own or seek support from a professional, we believe that the underlying process is the same. Understanding what’s important to you and your current situation is the cornerstone for creating a financial plan. It centres on you spending and giving money in alignment with your values and what makes you happy. Money can help with this but it isn’t everything.

Read the full report here: SPW Money and Mind Report 2020