St. James’s Place’s (SJP) financial health research report reveals the devastating impact recent months have had on people’s financial situations – with women being hit hardest. As many as a quarter (25%) of women have found their household wealth has fallen in this past year, compared to just 19% of men.

Given this backdrop, a growing number feel less financially comfortable and resilient than they did last year. Over a fifth (21%) of Scottish adults describe their current financial position as struggling, compared to 10% in October 2021, while two in five (39%) do not feel financially resilient, compared to 27% previously.

Women feel in a worse financial position than men, with 26% saying they are struggling (vs. 18% of men) and 38% not feeling financially resilient (vs. 32% among men).

Many people have had to take action to cope with a more precarious financial situation – which could have an impact on their future finances. One in six (17%) have been forced to use their savings before they had planned (rising to 19% of women), while 16% have stopped putting money into savings (20% of women).

Among those whose wealth has increased in the last year, women have focused on making cutbacks and changes to their lifestyle, while men have made direct changes to their finances to try and grow their wealth.

Almost half (45%) of women that have seen their wealth increase in the last year made an effort to reduce their monthly spend on goods and services – compared to 34% of men that did the same.

Men focused on:

• Proactively seeking better interest paying investments (21% vs. 17% of women)
• Increasing risk appetite on investments (12% vs. 8% of women)
• Switching providers for household services (25% vs. 19% of women)

Alexandra Loydon, director of engagement and consultancy at St. James’s Place, said: “The last few months have taken their toll on many people’s finances, as inflation has hit record levels and the cost of living has soared.

“Understandably, a lot of people now feel they are struggling financially and have had to take action to cope, including dipping into savings earlier than planned.

“Our research shows women tend to be more concerned about the rising cost of living and the financial impact this is having. This is likely driven by the fact women tend to earn less than men, resulting in less disposable income and ability to save, which also contributes to smaller retirement pots.

“It’s positive to see that some men and women are proactively looking at ways to grow their wealth even in this difficult period. Unfortunately, the cost-of-living crisis is going to reach more and more people as the year goes on, especially when energy bills rise again in Autumn and Christmas costs come in.

“Where possible, we would encourage households to both look at their spending and see if any cutbacks can be made, and also consider maximising current wealth by seeking the best interest paying accounts or increasing risk appetite if appropriate.”

The research also shows that consumers are taking more of a short-term view when it comes to their finances, with 71% admitting they do not have a financial plan in place for the future – increasing from 62% last year. Just 29% say they do have a plan in place. Furthermore, in the past year, just over a fifth (22%) have received professional financial advice, while 75% have not.

Ms Loydon continued: “During difficult periods, having a plan to take control of your financial situation can be really beneficial both for the short and long term.

“For example, putting in place monthly budgets to understand where your money is going, or asking yourself whether you really need to make purchases will help keep everyday spending in check.

“Meanwhile, reviewing your financial goals will help you avoid making any rash decisions during these uncertain times.”