One in three people feel financially worse off than a year ago, according to a recent survey by the Pensions and Lifetime Savings Association (PLSA). The survey, which included responses from more than 2,000 participants, revealed that 34% of people reported a decline in their financial situation over the past 12 months.
On the bright side, just over a quarter (27%) of those surveyed said they have seen an improvement in their financial position, while 39% stated that their financial situation has remained steady. This marks a slight improvement from last year, with the proportion of people feeling worse off dropping from 44% in 2023.
Despite these changes, a significant number of households are still feeling the financial strain, with 41% indicating that they are making cutbacks in various areas of spending. Common areas where people are reducing expenditure include dining out, takeaways, and leisure activities.
Interestingly, the survey highlighted that contributions to pensions were among the least likely expenses to be cut, indicating the importance people place on saving for their retirement. In fact, there was strong support for increasing automatic enrolment pension contributions, with around half of non-retired individuals advocating for a rise from the current 8% to 12%.
Furthermore, the research found that many savers believe employers should contribute more towards pensions, with 45% suggesting contributions should be split equally between employers and employees, and 43% arguing that employers should contribute more than employees.
On the subject of pension investments, the survey revealed that a majority of participants (65%) believe that pension providers should prioritize achieving the best possible returns, regardless of whether the investments are in the UK or overseas. Nigel Peaple, Chief Policy Counsel at the PLSA, emphasised the importance of balancing support for UK companies and public services with the need for strong investment returns.
In response to the survey findings, a spokesperson from the Department for Work and Pensions highlighted the success of automatic enrolment in encouraging millions of people to save for retirement. They also mentioned ongoing efforts to explore options for further expanding pension savings to benefit more individuals.
Overall, the survey sheds light on the financial challenges faced by many individuals, the importance of saving for retirement, and the ongoing discussions around pension contributions and investments to ensure financial security in the future.