The majority of people in the UK are feeling positive about their finances for 2024, with optimism the cost of living crisis is starting to abate.
The research by Aegon found over half of UK adults (52 per cent) said they felt positive about their finances for the year ahead, with just under two in five (38 per cent) having a more negative outlook.
However women, (47 per cent) and those in the 50 to 59 age bracket (46 per cent) were less likely to feel positive compared to the average.
Paying for basic living expenses (37 per cent) is the most common financial priority for UK adults going into 2024. This is particularly true for women and those in their 50s.
Building emergency savings (32 per cent) and enjoying life (28 per cent) are also common financial priorities — although Aegon nots that ‘enjoying life’ has dropped down the priorities list from the previous research carried out in late 2021.
When asked if specific events would change how people feel about their finances, almost half (49 per cent) think lower inflation would make them more optimistic; by contrast, only a quarter (26 per cent) say their view wouldn’t change regardless of movement in inflation.
Aegon’s pensions director Steven Cameron says: “As we enter 2024 and look to the year ahead, our research suggests people’s confidence and optimism is returning when it comes to their personal finances. For many, this is being bolstered by recent falls in inflation and hopes for further reductions.
“But our research also points to how the cost-of-living crisis and paying for basic living expenses remains the priority for many individuals and their personal finances.
“Since previous research, released in 2022, ‘building up emergency savings’ has overtaken ‘enjoying life’ to sit in second place. Those prioritising ‘enjoying life’ has dropped to 28 per cent from 34 per cent over that period.
“Those aged 50 to 59, in the early years of their ‘Second 50’ are less likely to feel positive about finances and a gender divide exists, with females far less likely to feel positive about finances than males.”
He adds: “Our research makes it clear that lower inflation would make people more optimistic about their personal finances in the year ahead. Recent drops in inflation are hopefully a sign that inflation can be brought back under control after a tumultuous 18 months.
“Crucially ‘paying for basic living expenses’ (37 per cent) is the most common financial priority for UK adults going into 2024. The cost of everyday living, from hefty gas and electricity bills to the price of food is a huge challenge for millions of individuals and households.
“Those on a fixed income continue to face a tricky time ahead, and that includes many pensioners despite the inflation busting 8.5 per cent rise in the state pension from this April due to the triple lock.”
He adds that the ‘elephant in the room’ remains whether the triple lock is sustainable over the longer term. “The state pension is a lifeline to millions but is very costly for today’s workers to fund from their National Insurance. We urge all political parties to make their state pension intentions clear ahead of the General Election. It could have a major influence over voting preferences.”
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