Large numbers of people across the UK are facing ongoing financial hardship, according to Royal London’s latest Financial Resilience Report, with one in five adults reporting cash savings of less than £100—a figure unchanged for the past two years.
The report highlights widespread financial vulnerability, particularly among mid-life households and families with young children. It found that 9% of adults are on the brink of a financial crisis and a further 2% are already in one, with mid-lifers the worst affected: 16% are either in or close to a crisis, and only 41% are satisfied with their standard of living.
While some improvements have been recorded—59% of adults now say they have money left over at the end of the month, up from 49% last year—the recovery is far from universal. Among families with children under 18, 47% said they were close to financial crisis or feeling the pinch. Many are making cutbacks, with 36% reducing heating, 33% cutting back on leisure, and 11% limiting meals.
Single-person renters are among the hardest hit by rising housing costs. Nearly 80% reported increases in rent, with an average rise of £218 a month. Private renters faced the sharpest increases at £304 per month, while social housing tenants saw costs climb by £159. Over half of mortgage borrowers across the sample reported an average rise in monthly payments of £327. Among those living alone, this figure rose to £298.
Longer-term financial health has also been affected. Although just 5% of adults said they had reduced or stopped pension contributions over the past year, 43% acknowledged that their retirement plans had been impacted by the cost of living. The report found that 69% do not know how much is in their defined contribution pension, while 52% had not considered how much they will need in retirement over the past year.
Sarah Pennells, consumer finance specialist at Royal London, said: “We have seen some signs of an improvement in people’s finances in the last year, but those still struggling with higher bills and food prices face difficult decisions as they try to rebalance their household finances. We’re seeing a big divide between those who can absorb higher costs and those making daily sacrifices—cutting back on essentials, dipping into their savings, or going overdrawn at the end of the month.”
She added: “While it’s encouraging that some people have been able to start to build up their savings, it’s very concerning that one in five have less than £100 in savings – exactly the same percentage as in March 2023 when we first asked this question, and unchanged for the past two years.”
Pennells urged people to seek support where available: “We encourage anyone who’s struggling to visit independent resources like MoneyHelper, our charity partner Turn2us, or Citizens Advice, to explore the support they may be entitled to, and take steps to get their finances on track.”
