Table of Contents
Executive Summary
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- Impact of COVID-19 on financial lifestages and financial priorities
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- Figure 1: Short-, medium- and long-term impact of financial lifestages and financial priorities, 2020-25
- The market
- Ageing population poses concern for pensions pots
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- Figure 2: Population, by age group, UK, 1966-2041
- Unemployment set to rise, with young worst affected
- Inflation rise poses threat to financial confidence
- The consumer
- Consumers look to save
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- Figure 3: Changes in financial situation since the start of the outbreak, 2021
- Older consumers keen to enjoy life
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- Figure 4: Current top three consumer lifestyle priorities, 2021
- Pent-up demand spurs on the housing market
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- Figure 5: Lifestyle changes experience din the last 12 months and changes expected in the next two years, 2021
- Pandemic raises awareness of need for emergency savings
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- Figure 6: Current and future financial priorities, 2021
- Income central to financial confidence
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- Figure 7: Factors consumers consider most important to financial happiness, 2021
- Young adults look for more financial planning advice
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- Figure 8: Attitudes towards financial plan and planning, 2021
Issues and Insights
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- COVID-19 could further delay lifestage ambitions for many young adults…
- …but for those with new savings pots there are opportunities to engage
- Helping the ageing population prepare for later life
The Market – Key Takeaways
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- Ageing population poses concern for pensions pots
- Young adults see further setbacks in journey to financial lifestages
- Inflation rise poses threat to financial confidence
Market Environment
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- Ageing population poses concern for pensions pots…
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- Figure 9: Trends in the age structure of the UK population, 2015-25
- …as well as further questions about long-term care
- Adult children staying at home for longer
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- Figure 10: Young adults aged 15-34 living with their parents, by age, UK, 1996-2020
- Birth rate drops as young delay having children…
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- Figure 11: Trends in the number of live births, England and Wales, 2000-20
- Unemployment set to rise as furlough scheme ends
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- Figure 12: Quarterly unemployment rate, Q1 2008-Q1 2026 (forecast)
- Both wages and inflation rise
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- Figure 13: Real wages growth: wages growth vs inflation, 2010-21
- Financial confidence continues to rise
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- Figure 14: How respondents would describe their financial situation, by demographics, 2021
The Consumer – Key Takeaways
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- Consumers freeze in uncertain economic climate
- Savings have surged and consumers have a range of plans for their funds
- Seniors look to enjoy life more…
- …while the growing Sandwich Generation needs more support
- Income central to financial confidence…
- …but the employment market looks to be shaky for today’s young
- Pent-up demand spurs on the housing market
- Home ownership becomes more important symbol of financial happiness with age
- Young adults demand more personalised support
Impact of COVID-19 on Consumer Behaviour
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- Consumer anxieties trace pandemic waves
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- Figure 15: Mintel COVID-19 exposure anxiety and lifestyle impact index, 2020-21
- Consumers continue to curb spending
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- Figure 16: Proportion of adults cutting back on non-essential spending, 2020-21
- Furloughs and job losses hit households…
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- Figure 17: Changes in financial situation since the start of the outbreak, 2021
- …but some consumers still manage to grow their savings
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- Figure 18: Changes in levels of savings since the start of the outbreak, 2021
- Opportunity to engage with consumers about how and where they save
Top Consumer Lifestyle Priorities
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- Consumers look to enjoy life more…
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- Figure 19: Current top three consumer lifestyle priorities, 2021
- …posing opportunities for equity release market
- Health proves a key priority for all financial groups
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- Figure 20: Proportion of adults who say that “improving their physical/metal health’ is a priority, 2021
- Meeting the needs of the growing Sandwich Generation
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- Figure 21: Proportion of all adults who include ‘caring responsibilities’ among their top three lifestyle priorities, by age, 2021
Lifestyles Changes and Expectations
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- A shaky environment as the young start their careers
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- Figure 22: Lifestyle changes experienced in the last 12 months and changes expected in the next two years, 2021
- Pent-up demand spurs on the housing market
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- Figure 23: Proportion of adults who have moved house in the last 12 months or expect to in the next two years, by age , 2021
Financial Priorities Now and in the Near Future
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- Pandemic raises awareness of need for emergency savings
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- Figure 24: Current and future financial priorities, 2021
- Even affluent households need encouraging to save
- The young still prove focused on the home…
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- Figure 25: Proportion of adults who indicate that “saving for a new home/home improvements” is a current or future priority, by age, 2021
- …paving the way for campaigns and automated saving features
Factors Most Important to Financial Happiness
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- Income central to financial confidence
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- Figure 26: Factors consumers consider most important to financial happiness, 2021
- Home ownership becomes more important with age
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- Figure 27: Proportion of adults who consider ‘owning your own house’ as a key factor for financial happiness, 2021
- Older age groups more focused on having savings to fall back on
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- Figure 28: Proportion of adults who consider ‘having savings to fall back on’ as a key factor for financial happiness , 2021
Attitudes towards Financial Plans and Planning
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- Young adults demand more personalised support
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- Figure 29: Attitudes towards financial plan and planning, 2021
- Age-centric marketing deemed clichéd at every life stage
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- Figure 30: Proportion of adults who agree “I find financial products and services targeted to my age/generation to be clichéd”, by age, 2021
- Helping newfound younger savers with financial planning
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- Figure 31: Financial lifestages and financial priorities – CHAID analysis – Tree output, 2021
- Younger women find money a stressful topic
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- Figure 32: Proportion of adults who agree that “I find it stressful to thin about financial matters”, by age within gender, 2021
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- Figure 33: First Direct
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
- Supporting data
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- Figure 34: Changes in spending habits compared to before the COVID-19 outbreak, 2021
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