The Impact of Financial Stress on Wellbeing

New research from St. James’s Place (SJP) has revealed that the persistent financial strain is significantly impacting the health and overall wellbeing of individuals in the UK. According to the study, nearly 50% of adults in the UK have experienced negative effects on their mental and physical health due to financial difficulties in the past year.

The findings also indicate that around half of the respondents have been more worried about their financial situation this year compared to previous years. It is clear that financial concerns are not only affecting household finances but are also having a detrimental impact on various aspects of people’s lives, including sleep, relationships, and work. In fact, 15% of the participants reported experiencing serious stress and anxiety issues as a result of financial stress.

The impact of high inflation on essential expenses such as mortgage and rental payments, energy costs, and general living expenses has extended beyond just straining household budgets. Shockingly, the research revealed that 47% of adults have seen their mental health decline as a direct result of financial stress, a figure that rises to 66% among 18- to 34-year-olds. Furthermore, 25% of participants reported mood disturbances, 18% experienced sleep disturbances, and 17% felt anxious about social interactions due to financial worries.

The study also highlighted that financial strain has led to a decline in physical health for 46% of the respondents, particularly among the younger age group of 18 to 34-year-olds (66%) and those aged 35 to 54 (53%). A concerning 19% reported that financial anxiety has affected their physical appearance, resulting in issues such as hair loss and premature greying. Moreover, 19% of participants have had to compromise on their diet by buying cheaper, less healthy food, and 10% have experienced weight-related concerns.

Looking towards the future, the outlook for 2024 appears bleak for many individuals. With 49% expressing increased worry about their finances compared to previous years and an anticipated challenging economic climate, a significant portion of the population feels anxious (31%), stressed (26%), and vulnerable (17%) about their financial situation in the coming year.

However, the research emphasizes that having a financial plan in place can alleviate some of these concerns and boost confidence in navigating through tough economic times. According to the findings, 41% of UK adults have a financial plan, and among them, a staggering 72% feel financially resilient. Conversely, among those without a financial plan, only 51% feel financially resilient.

In light of these findings, Alexandra Loydon, director of engagement and consultancy at St. James’s Place, stressed the importance of seeking advice and support during challenging times. Loydon highlighted the significance of having a financial plan in place to regain control over finances and enhance financial resilience. She also encouraged individuals not to feel alone and to seek help from debt advice charities, financial advisers, and mental health professionals.

The study by SJP sheds light on the profound impact of financial stress on people’s lifestyles, mental health, and physical wellbeing. It underscores the need for individuals to actively address their financial concerns, seek professional advice, and establish a financial plan to minimize the adverse effects of financial strain on their overall wellbeing.