As the number of people who are financially struggling increases, fewer people are acquiring protection cover, according to the latest research from LV=.
“Financial stresses are forcing people to dip into savings to meet today’s needs, while fewer adults are acquiring protection cover (such as life insurance or income protection) leaving more households financially vulnerable,” LV= said.
According to its research, some 22 million UK adults are financially struggling today, leaving the nation’s financial resilience at an even lower ebb than during the height of the Covid-19 pandemic.
LV= surveyed 4,000 nationally representative UK adults via an online omnibus conducted by Opinium in June.
For the past three years, LV= has conducted a research programme investigating financial resilience across the UK.
Building on this data set spanning 13 editions, the insurer has now launched the LV= Wellness Tracker that produces a single measure of the nation’s financial resilience over time by comparing the number of people who are financially ‘comfortable’ against those who are ‘struggling.’
The Tracker currently stands at +17 (58% comfortable vs 42% struggling), indicating that the nation’s financial resilience is much lower than three years ago.
In fact the percentage of people who are in a comfortable financial situation improved slightly from 57% in March 2023 to 58% in June 2023, which was also the same figure for December 2022. In contrast, 42% felt they were financially struggling.
But the general trend appears to be downwards. A total of 72% felt they were in a comfortable financial situation in June and September 2021 during the height of the pandemic, as opposed to 28% who thought they were struggling.
In the most recent findings, more than over one in four (27%) UK adults say that just paying bills has been a challenge over the past three years, while a third (32%) helped friends and family to make ends meet in the first half of 2023, according to the LV= research.
Some 20 million Britons reported that they are worried about money, six million more than three years ago. According to ONS statistics the total UK adult population is 52.9 million people.
Attitudes towards financial advice
But people are willing to look for financial advice, though not necessarily in traditional places.
A total of 43% of UK adults surveyed said they would look to consumer finance websites like MoneySavingExpert, while 38% would turn to a financial adviser for advice on their finances.
A total of 4.0% said they would go to TikTok. But 14% said they would not seek any financial advice at all.
Looking at 18-34 year olds, one in five said they would use YouTube for financial advice and 29% would look to family and friends.
Meanwhile a total of 86% of advised consumers saw benefits to the advice that they received.
David Hynam, CEO of LV=, (pictured) said: “More and more people face a choice between paying their bills, putting food on the table and saving for the future.
“The fact that families and friends are helping each other through the ongoing cost–of-living crisis shows that our community bonds are still strong, but it should concern us all that people are having to withdraw future savings to meet today’s costs.”