The feel good factor

Posted on: 21 January 2015 by Steve Wanless

Steve Wanless queries whether our financial health and mood is better as we look forward to the challenges 2015 has to offer.

financial feel-good factor

Are we in better shape than this time last year? I’m not talking about your waist-line or hair-line, but financially – both individually and nationally.

The individual aspect is rather easier to determine. Check the bank balance, the loans, and the assets – and hopefully there is a bigger gap between the plusses and the minuses!

Nationally is a much more difficult prospect. Unemployment is down and the UK’s growth is one the best around, yet events beyond these shores could seriously impact on our well-being.

Greece and the euro has returned to haunt not just the European Community. Serious economic problems in the USA, Russia or China, as well as Europe, can undo much of the benefits of the austerity experienced over the past six years.

The UK might be an island, but it is almost impossible to protect or immune yourself and your finances from events around the world. That is one of the reasons Independent Financial Advisers (IFAs) suggest spreading the risk when proposing long-term investments.

The falling oil price can cause turmoil to stock markets around the world; yet we in the UK are seeing the first real reduction in filling up our cars in a very long time. There is even talk that we might get down to £1 a litre.

The Office of National Statistics (ONS) has revealed that household spending was higher last year than at any time since the Coalition came to power in 2010. Yet the same report highlighted the fact that both wages and household spending have fallen since 2008.

One of the most interesting statistics from the ONS was that average workers’ weekly pay packets have fallen 10.3% between 2008 and 2014. Low-skilled workers have actually seen a drop of 13.5%.   Youngsters suffered worst, with wages falling by 15%, compared to 7% for the over sixties.

The average weekly household expenditure in 2013 was £517, showing an increase on non-essential items like new cars, holidays, toys and cinema trips. Housing, fuel and power were the most expensive part of the total spend at £74.40; the previous year the top spend had been transport, which now costs £70.40 a month. Next was recreational and culture (£63.90) with food and non-alcoholic drinks costing £58.80. Households, on average, spent £6.20 a month on health, £8.80 on education and £12 on alcohol, tobacco and drugs!

Despite, or perhaps because of the six years of austerity since the 2008 financial crisis, a recent survey of the over-50s placed financial security as their number one priority, followed by health and seeing their grandchildren growing up. The survey of 1,000 people, organised by the lifestyle website, discovered that one in four people in their fifties claimed they feel 10-14 years younger than their real age.

With age, comes some sort of freedom, according to this survey. Over half (51%) said the best thing about getting old was only doing the things they liked, while 45% revealed that they no longer cared what people thought about them!

We are changing, we are living longer; the statistics confirm that. We are also getting bigger. The average UK male now stands at 5’ 9” – two inches taller than in 1954, the year rationing ended. Today, his neck is two inches bigger, he’s a stone heavier and takes a size 9 shoe, compared to a 7!

The study, carried out by The Idle Man, also revealed that today’s Mr Average is likely to exercise twice a week and eat and drink about a quarter more than he did in the fifties.

That progress has its own problems. “Tackling the obesity crisis in the UK is a pressing concern with around two thirds of adults either overweight or obese,” admits Christopher Allen at the British Heart Foundation.

The average life expectancy for a man in 1954 was 68, and 71 for a woman; the gap has grown to four years, but men now get another 11 years and women 12. Sadly, such increases are not restricted to age; there’s bureaucracy and all matters official that affect our lives.

This is no better demonstrated than the problem the residents of Tarnock in Somerset have been facing in the past two years over a road sign. Nobody will be surprised to learn that road signs have more than doubled from two million in 1993 to more than 4.6 million today.

The sign came down in 2012 and had been lying in the undergrowth by the side of the road ever since. This matter has even been raised in parliament by the local MP, and the leader of the Commons, William Hague, described the situation as “barmy”.

But it remains on the ground while the Somerset County Council consults 22 different bodies and firms before it can be put back.

“We have legal obligation to gather relevant information before carrying out work. This isn’t a sign that has any road safety benefit so it has to wait while we do things that we have to consider higher priority,” said the Council spokesman.

The financial world can sometimes feel just as intimidating, with so many forms, requirements and regulations; fortunately, there is always help at hand with an IFA, to explain, advise and plan for the financial road ahead.

For a free, no obligation initial chat about your individual finances, call us on 0800 0112825, e-mail or take a look at our website

The value of shares and investments can go down as well as up. Your home may be repossessed if you do not keep up repayments on your mortgage.

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