Financial priorities shift with nearly 41 per cent prioritising meeting the demands of the cost of living crisis while 31 per cent will be “just getting by”, according to Aegon.
At the beginning of the year, 34 per cent were prioritising enjoying their lives with their finances.
According to the data, meeting the growing cost of living is one of the top financial issues for 49 per cent of women while just 33 per cent of men made the same claim.
Additionally, the data shows that over 55’s are most likely to prioritise meeting the demands of the cost-of-living crisis with nearly 47 per cent stating that this was the case, compared to only 40 per cent of those between the ages of 35 and 54 and 35 per cent of those between the ages of 18 and 34.
At the beginning of the year, 34 per cent were prioritising enjoying their lives with their finances. Meanwhile, the percentage of adults who prioritise saving for emergencies has decreased from 31 per cent at the beginning of the year to 21 per cent as of this month. For men, this decline was greater than for women. Gen X experienced the largest decline, from 38 per cent to 28 per cent, while those in the 18–34 age group, who have never seen this level of inflation, experienced a smaller decline, of only 5 per cent.
Aegon pensions director Steven Cameron says: “With inflation at its highest since the 1980s and predictions suggesting it could reach above 18 per cent in January, there’s no doubt now is an incredibly financially challenging time for everyone and as a result, financial priorities have changed. The findings are a clear reflection of the nation’s mood and reinforce that cost-of-living will be one of the biggest challenges facing the new prime minister when appointed on 5th September.
“The biggest shift in financial priorities has been amongst women and the over 55s. While it’s dangerous to generalise, the gender difference may be because men traditionally tend to take a longer-term approach to finances, whereas women are typically more risk averse and more likely to lead on shorter-term, day-to-day financial priorities, which may make them feel the current crisis more acutely. The over 55s may be particularly concerned at the prospect of retiring on a fixed income in the nearer future.
“With most people no longer in a position to prioritise enjoying life and are instead focussing on ‘just getting by,’ it’s understandable that building emergency savings is not a priority at the moment. However, such savings can create a buffer for unexpected financial shocks.
“As the group most likely to be prioritising enduring the cost-of-living crisis, those over age 55 may also be tempted to dip into their retirement savings to get by in the short term. It’s important to understand that doing so limits how much you and your employer can contribute to your pension in future. And of course, money taken out today won’t be available to fund your later life.”
