Financial priorities shift to ‘just getting by’ amid rising living costs – Aegon

Financial priorities have seen a significant shift in the last six months as UK adults face rising inflation and increased living costs, new research from Aegon has indicated.

The pension provider’s findings show that, for the rest of 2022, adults’ top financial priorities will be meeting the rising cost of living (41%), and “just getting by” (31%).

This is in stark contrast to the outset of the year, Aegon stated, when the mood of the nation was largely positive and more than a third (34%) were prioritising enjoying their lives with their finances.

Aegon pensions director, Steven Cameron, commented: “With inflation at its highest since the 1980s and predictions suggesting it could reach above 18% 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 5 September.”

While meeting the rising cost of living came out as the top priority across the board for the second half of the year, the research revealed that women are prioritising the cost of living crisis more than men – with around half (49%) of women saying one of their top financial priorities is meeting the rising cost of living, opposed to only a third (33%) of men declaring the same.

The research, based on a study of over 2,000 people, also showed that those over the age of 55 are the age group most likely to be prioritising enduring the cost of living crisis for the rest of the year – with 47% saying this was the case, compared to only 40% of those aged between 35 and 54, and 35% aged 18 to 34.

“The biggest shift in financial priorities has been amongst women and the over-55s,” Cameron added.

“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.

“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.”

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