People’s financial habits changed by events of 2016

18 January 2017

  • Over half of UK adults say the significant events of 2016 had a real influence on how they managed their finances
  • 16% said their main reaction was to put off making some important financial decisions
  • Over one in ten made building a bigger savings buffer  their main response
  • Top financial goal for people in 2017 is to save more than they did in 2016

New research from global investment company Standard Life reveals that the significant events of 2016 influenced the way over half of UK adults managed their finances, with 16% putting off making some important financial decisions last year as they are now more cautious. An additional 11% of UK adults said all the change and uncertainty made them worried about their finances and unsure what to do.

However, the events of 2016 also drove some people to take action, with almost one in ten (9%) responding by becoming more proactive and taking more control of their finances. In addition, one in ten (9%) responded to the uncertainty by focusing on being more prudent and cutting costs where possible, while 12% said saving more became their priority, and they created a bigger buffer against any potential bad times ahead.

Financial goals for 2017

The research also revealed that the most popular financial goal for 2017 is to “save more than in 2016”, with saving up for big ticket items like a holiday popular too. Almost one in five (18%) UK adults are planning to tighten their belts and cut costs in 2017 and for some (16%) paying off debts is a priority.

 

Top financial goals for 2017 Total population (%) Male (%) Female (%)
1.    To save more than I did in 2016 27 26 29
2.    To save up to afford a holiday 21 21 21
3.    To tighten my belt, spend less and cut as many costs as possible 18 14 21
4.    To review all my utilities to get much better deals 17 19 16
5.    To pay off my debts 16 16 16
6.    To set a budget and stick to it    15 13 17
7.    To pay off my credit card 15 16 14
8.    To increase how much I save towards my retirement 10 12 9
9.    To write a will    10 9 10
10.    To spend less on clothes 9 4 13

 

Uncertainty and the markets

When asked if all the uncertainty and change experienced in 2016 had altered how likely they were to invest in stocks and shares, 6% of UK adults said they were more likely, 7% said they were less likely and 20% said it hadn’t changed anything for them. Over 55% said they don’t invest or plan to invest in stocks and shares and a further 11% said they hadn’t given it much thought. 

The research also found that almost a third (30%) of UK adults still have no idea how much money is in their pension, and the majority are out of touch with how stock markets performed in 2016. Just one in five UK adults (21%) recognised that stock markets mainly climbed over the course of the year and almost a quarter of adults (24%) wrongly believe that the markets mainly fell.

Commenting, Jamie Jenkins, personal finance expert at Standard Life said: “It seems inevitable that the major events of 2016 would have an effect on people’s approach to financial planning and our research shows that some people put off making important financial decisions, while others were driven to save more, which remains the most popular goal for 2017.

“Aiming to save more and build a solid buffer is always a good thing, and the start of the year is a good time to make a plan to see how much you can regularly tuck away. But it’s not just how much you save, it’s where you save that’s important too. So look for the best rates on savings accounts and ISAs, and look beyond traditional savings too, to the opportunities offered by investing.

“By the end of this year, almost every business in the UK will have to provide a workplace pension scheme. That means many more people working for the country’s smallest businesses will be automatically enrolled in their workplace pension, joining over 7 million people who have already made a good start with their pension savings. Everyone should look to make the most of the opportunity that provides.”

For more information on ISAs, pensions and investing visit www.standardlife.co.uk

Notes to editors

For further information contact:

  • Megan Fell, Becca Bridge or Inder Gill at standardlife@3monkeyszeno.com or 0207 009 3100
  • John Lang at john_lang@standardlife.com  or 0131 245 0046

The research

The research was carried out online for Standard Life by Opinium. Sample size was 2000 adults. The figures have been weighted and are representative of all GB adults (aged 18+). Fieldwork was undertaken 16-19 December 2016.