A new consumer finance survey carried out this month suggests that 32% of people have cut back on saving due to the cost of living crisis.
The survey by provider Aegon also suggests that money worries are already worse than the Covid-19 pandemic.
The study found that 63% of people are worried about their finances compared to 36% at the peak of the pandemic.
The research points to a rise in the number of people who have cut back on the amount they save and the number who have dipped into their financial reserves.
Nearly a third (32%) of those with money worries have cut the amount they save and a fifth (20%) have used up some or all of their emergency savings. However, only one in 20 (5%) have reduced or stopped contributions to their pension.
Financial worries are higher among women than men. Seven in 10 (69%) of women said they were worried about their finances compared to 56% of men.
Aegon research has tracked adults’ relationship with their finances since the start of the Covid-19 pandemic.
Overall 54% of people say they have cut back on daily expenditure and 31% have cancelled subscriptions as they try to deal with soaring bills.
The research found that money worries were widespread across the income brackets, despite the fact that lower income households may be “least resilient.”
A quarter (25%) were just concerned about their short-term finances and 27% just concerned about their long-term finances but nearly half (45%) were concerned about both.
Steven Cameron, pensions director at Aegon, said: “The Coronavirus pandemic caused huge social and economic turmoil, affecting our lives in different ways. However, when focusing on the impact on personal finances, there were significant disparities, with some seeing their income fall while others were unaffected and could even build up their financial resilience as expenditure reduced.
“Unfortunately, as we started to get back to normal after the pandemic, we’ve been hit by the worst cost-of-living crisis in most people’s living memory. The research shows money worries now are even greater than during the pandemic. Many of our most vulnerable will face the greatest challenges with some already affected financially by the pandemic now being hit again by soaring inflation. But as prices rise throughout the economy, individuals across the income spectrum are concerned and feeling the squeeze.
“Our research shows many are already taking action to cut costs by reducing day-to-day expenditure and cancelling unnecessary commitments. But worryingly, the research also points to a decrease in saving rates. While this may be unavoidable, it could have long-term implications on financial resilience.”
• Aegon research among 2,000 adults was conducted by Opinium between 29 July and 2 August.
