New Study Reveals a Quarter of Britons Have Sleepless Nights Due to Money Worries

A major new study by Standard Life has shed new light on the state of Britain’s personal finances and the results are far from rosy. ‘Retirement Voice 2023’ captured the thoughts of 6,350 people, right across the UK between July and September 2023. The study aimed to shine a light on some of the nation’s most pressing financial issues. Some of the most worrying findings centred on how many people are worried about money.

What Did the Study Find?

The key finding was that dealing with ongoing financial issues is having a significant impact on the nation’s emotional wellbeing.

Not only are people feeling stressed because of cost of living issues, but 1 in 4 (26%) say looking after their money has caused them to lose sleep, while a similar number (23%) believe it’s contributed towards their poor mental health.

Overall, it’s the younger generations who are more likely to admit that they’ve suffered from an emotional or health issue as a direct result of managing their finances. The survey asked whether people’s finances had caused them sleepless nights, led to poor mental health, meant they had been unable to focus, led to arguments with family members, impacted their physical health or forced them to take time off work.

7 in 10 (73%) Gen Zers (18-25 year olds) and almost two-thirds of Millennials (26-41 year olds) say they’ve been impacted by at least one of these issues as a direct result of their financial worries. This compares with half of Gen Xers (42-57 year olds) and less than a third of Baby Boomers (58-80 year olds).

What do the Results Tell Us?

Across all of these issues, the age trend is clear; younger people are more worried than older people about their money and suffer more. This is to be expected given the significant generational long-term trends. When it comes to money, younger cohorts have fared less well in many ways than older people so it is little surprise these money worries are having a bigger impact on them.

Many younger people have significant debts – be this from university tuition or mortgages that were not at the same level for older generations. On top of this, many younger people have had to contend with declining real wages over many years, less secure employment in many sectors and the slow phasing out of ‘defined benefit’ (AKA ‘final salary’) pension schemes to provide security in retirement. There are also the demographic impacts of an ageing society to consider which add to the money worries of younger generations.

Surveys show that many younger people now believe the State Pension will become unsustainable in its current form and that the State Pension age will need to rise significantly as the ratio of workers to retirees continues to grow. Concerns about funding retirement were among the top worries across all age groups who were yet to retire.

Some Tips To Avoid Money Worries

When it comes to money, it’s natural for this to consume our thoughts at certain times. Money is crucial in all our lives and whether it’s debts, thinking about the future, reflecting on investment losses or just making the right financial decisions, we’ll all have periods when money matters dominate our thoughts. But if money worries are getting too much to cope with and are causing major problems, what steps can you take to help? Here are a few tips:

• Don’t avoid your financial responsibilities. When faced with money worries and stress, it’s common for people to avoid confronting them. This is rarely a good move. It’s important to confront these issues head on as ignoring your finances can lead to further complications and stress down the line.
• Discover the underlying cause. Try to work out the root of your money worries by asking yourself the right questions. Why are you worried? What are the risks? How can you best deal with the situation? What are your options? What caused the problem in the first place?
• Take a financial inventory. Stress often stems from the unknown. Familiarise yourself with your finances by meticulously tracking your spending, scrutinising your budget and detailing your assets and liabilities (debts). Understanding your monthly cash flow grounds you in reality and can alleviate stress by removing uncertainty.
• Streamline your finances. Try to simplify your financial affairs as much as possible so you are not overwhelmed with paperwork. Also, think about automating your money as much as you can – your savings and credit card repayments, for example. This will take a lot of stress out of the day-to-day management of your money and mean things are less likely to go wrong over time.
• Make sure you are adequately insured. Having financial insurance in place (life insurance, critical illness cover and income protection insurance, for example) can significantly reduce financial stress. These policies act as a safety net, providing financial support in case of unexpected events like death, illness, disability or unemployment.
• Establish an emergency fund. Financial worries often revolve around unexpected expenses. Think about creating a financial safety net equivalent to three to six months of living expenses. This should be held in readily accessible cash savings Not only does this cushion provide financial security, but it also offers peace of mind during tumultuous times.
• Become comfortable discussing money. Many people still shy away from conversations about money with friends and family. By regularly engaging in discussions about your financial situation with loved ones, you can develop the confidence to decline unnecessary expenses and stay co-ordinated with your partner to deal with issues head-on and plan for the future with confidence.

Getting More Help

If you have been impacted by any of the issues raised in this article, the NHS have information on coping with financial worries or you can contact Citizens Advice or Money Helper for free support. Some people may benefit from employing a financial planner to help guide them and take the worry out of managing their finances.

If you would like to talk about any of the issues in this article or need more general help with your finances, please get in touch with us.

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