Embargoed 00:01am Monday February 7th 2022
Financial well-being is broadly defined as having enough money to pay for everyday expenses, a little extra for enjoyment, save for the future and broadly, being able to cope with a life event taking place. Such an event could include loss of income (including retirement and redundancy), illness, relationship breakdown and even loss of life.
In this latest report from MoneyWhizz, the broad state of financial well-being in Ireland is examined through a series of targeted questions. Each of the questions examines specific events that could pose a financial challenge to both an individual and more broadly, to an entire household.
With inflation on the increase in Ireland and across the globe, the impact it has on the value of money is enormous. For those with savings or planning for their long-term financial needs, inflation erodes the purchasing power of money; a major risk to those in retirement. One way to counter this is by investing using both traditional methods and through pension options. This requires a mix of diversification and investment rebalancing which many people may be unfamiliar with and uncomfortable taking on without increased financial knowledge. MoneyWhizz is actively involved in helping people make informed financial decisions through its various initiatives.
In total, 320 responses were received in December and early January 2022.
Methodology of survey questions
There are nine primary questions plus one that was used to establish participant age, this was then used to carry out additional survey filtering. Each primary question presents a financial statement and participants were asked to rank their responses by how well each represented their personal situation. The survey identifies some positive trends. However, there is an underlying current of concern also. For example, in one of the survey questions “I am concerned that the money I have won’t last.”, while 19.82% of people feel this statement describes them ‘completely’ or ‘very well’, a further 33% of people feel the statement ‘somewhat’ describes them. Within the key findings, this is explained further.
- Ninety-five percent of people say they have the financial resources on hand to meet an unexpected expense.
- However, one-in-five people (19.82%) are very concerned that the money they have will not last. This increases to 53.14% when those that are ‘somewhat’ concerned are included.
- Six-in-ten (62.5%) people say they are doing well financially. However, one-in-six say they are just getting by.
- One-in-ten (9%) say that giving a birthday or wedding gift would put a strain on their personal finances. However, for those in their 30’s, this increases to one-in-six (17.24%).
- Half of people (50.89%) say they feel quite confident about their financial future. However, of concern, one-in-eight (11.43%) of those in their 40’s say this is not the case for them. This could be as a result of this cohort having many expenses including mortgages and the cost of raising children…and perhaps also becoming aware of future financial needs, including those in retirement which they should be taking action on now.
- Four-in-ten (39.29%) people feel that their current financial situation will prevent them from having the things they need or want in life. This increases to 45% (44.83%) of people in their 30’s.
Commenting on the findings, Mr. Frank Conway, Founder of MoneyWhizz said:
“The findings offer some positive insights, especially when it comes to current financial matters. This is evidenced by the high proportion of people confident that they could handle an immediate expense. However, there is an undercurrent of concern expressed in respect to the future. Today, more than ever, people will need to take firm action to protect their long-term financial well-being. This is due to a confluence of events, including rising inflation, longer lifespans, more years in retirement and, erosion of some income guarantees, especially the demise of defined benefit pension schemes. More people should be taking action sooner to build financial resilience, especially as they join the workforce. This includes enrolling in company pension schemes, taking advantage of additional voluntary contributions, using debt wisely and protecting their personal credit records. Plus, ensuring they diligently claim back qualifying tax relief from Revenue.
MoneyWhizz is a leading developer and provider of independent financial well-being supports in the workplace. It is also an advocate of financial education in schools across Ireland.