EU vote leaves people feeling pessimistic about finances

Adrian Berry, chair of R3 in Yorkshire and restructuring partner at Deloitte LLP, said pessimism seems to be creeping back in

The proportion of adults in Yorkshire who say they are concerned about their future financial health has been steadily increasing since June 2016, according to a new survey

by insolvency and restructuring trade body R3, and ComRes.

One in five (20 per cent) of adults in the region think their personal financial situation will deteriorate over the next six months, slightly above the UK average of 19 per cent. The level of pessimism in Yorkshire has risen from 15 per cent feeling worried about their finances in September 2016 and 14 per cent in June 2016.

The June 2016 survey, which was conducted just before the UK voted to leave the EU, saw personal finance pessimism at a record low throughout the UK, having fallen from a post-recession high of 43 per cent in February 2011.

Nationally, this pessimistic view towards personal finance is now at its highest level since February 2014, when it came in at 25 per cent.

Adrian Berry, chair of R3 in Yorkshire and restructuring partner at Deloitte LLP, said the increase in the number of British adults who think their personal financial situation will deteriorate over the next six months could be the first sign of a shift in attitude towards personal finances.

"The changes coincide with the period of rising inflation and falling real wage growth that we have seen since June’s referendum and the pound’s subsequent slump," he said.

"Increases in the cost of fuel from last year, which have been exacerbated by the pound’s woes, may have had an impact, too.

“So far, in contrast to expectations, the continued consumer confidence across the UK since the vote has kept the economy buoyant, but pessimism seems to be creeping back in.”

In the national poll, people aged 55 to 64 are the most pessimistic age group, with a quarter (24 per cent) expecting their financial situation to get worse over the next six months.

Men and women are equally worried about their future personal finance situation (20 per cent and 18 per cent respectively), continuing a trend from R3’s previous polls in September and June of last year.

Mr Berry added: “Only a quarter of adults (25 per cent) across the UK expect their financial situation to improve over the next six months – a level which has remained fairly consistent from before the referendum.

“For those who are expecting their circumstances to worsen down the line, professional advice is available to guide people through difficult financial situations.

"However, it is important that individuals are able to easily access accurate and effective information in order to help them plan for their financial future or for any unexpected changes, and to prevent problems from worsening.”

People who live in the West Midlands hold the highest levels of pessimism (25 per cent) about their personal finances over the next six months.

Recent research by R3 and ComRes shows that one in five people in Yorkshire say their mental health has been affected by personal finance worries.

Over a fifth (21 per cent) of adults in the region say that their personal or household finances are having a negative impact on their mental health while 5 per cent of Yorkshire adults say the finances of other family members who do not live in their household are having an effect.

The top five worries for people in Yorkshire are personal or family members’ health issues (24 per cent), personal finances (21 per cent), relationships with family (15 per cent), an individual’s or family members’ job (12 per cent) and UK or global current events (11 per cent).

Mr Berry said: “Whatever else is going on in the world, things much closer to home are most likely to affect people’s mental health.

"No matter how old you are, where you live, or what you do, personal finance concerns – even concerns about others’ finances – have a significant impact on your well being."