- The second Customer Lifestyle Report has revealed that the majority of UK adults surveyed are concerned about the rising cost of living.
- In addition, 40% say their current financial situation negatively impacts their mental wellbeing.
- With Christmas fast approaching, 1 in 4 say they are likely to reduce their usual festive spending, with the main cutbacks planned on present buying.
AXA UK’s second Customer Lifestyle Report has revealed that three-quarters of adults have cut spending – with days and nights out, the use of electrical appliances and gifts among the top items to curtail. These cuts and general concerns about costs are impacting people’s mental wellbeing, with 40% stating their financial situation has negatively impacted their mental health.
When asked about the impact of financial security on one’s sense of wellbeing, 82% agree that it is an important factor. Half of consumers surveyed also agree that not being able to afford things they want and need negatively impacts their self-esteem. Over half of people surveyed described themselves as ‘getting by’ in terms of mental health. Those aged 18-24 appear to struggle more than older adults, but all age groups are making intentional cutbacks to spending in the belief that it will improve mental wellbeing.
With Christmas just around the corner people are starting to think about their spending, although many are reluctant to sacrifice their traditional way of celebrating. 1 in 4 state that they are likely to reduce their Christmas spending this year and half shared that they don’t want to cut back but know this may be necessary. When finances do need to be reined in, many prioritise socialising and being with friends and family and plan to reduce their spending in other areas, such as on gifts, and food and drink, rather than on hosting parties and visiting friends and family.
However, despite this, many continue to have the same life goals for the future that they had earlier in the year and are optimistic about achieving them. For example, 48 per cent are planning a holiday and 83 per cent feel likely to achieve that goal. 37 per cent plan to save or invest and 70 per cent of them feel they are likely to manage that.
The report shows that consumers continue to make decisions their future selves will thank them for. Many are continuing to make short-term sacrifices to help achieve their longer-term goals. Just under 6 in 10 respondents say they are on track to achieve their long-term goals and do not foresee delays, with 70% believing their current approach and spending behaviours will enable them to do so.
Insurance is another area which has seen reduced spending, with 33 per cent of people having cut insurance costs. Most commonly, people have reduced their spending on car insurance which coincides with an intentional reduction in driving and transport costs. However, despite reductions in insurance spend, 1 in 5 are seriously considering buying health insurance in the next three months, to help achieve more convenient access to doctors' appointments.
We know that many people are having to make difficult choices about how they spend their money and with Christmas fast approaching, they may need to reduce spending on things that are not perceived as a necessity. Although reducing financial commitments may be important, it is essential people are protected and have the right cover for their needs, for the times when they may need it most.
We know that financial pressures can cause additional stress and our report shows that a significant number of people describe their mental wellbeing as ‘getting by’. I would encourage our customers to read our mind health report which shares tips and suggestions to help protect your mental health and wellbeing. We will continue to understand and respond to changing needs so we can remain relevant in our customers’ lives.
