One in seven £500 worse off a month

As the combination of austerity measures and cost of living hikes bite, 44% of people claimed their household was up to £250 a month worse off and a further 18% estimated they were between £250 and £499 worse off a month.

With the majority of people adjusting to a lower income, nine in ten people predicted they would have to face up to a major financial burden over the next five years (89%) and more than two thirds of Britons (67%) said they had been forced to revisit their financial priorities in recent months.

Whilst 43% have cut down on their spending in order to free up cash, the research paints an unsettling picture of people focused on the short-term, with the very real trap of being financially stranded later on. 38% of people said they didn't even have a long-term financial plan in place.

More than one in ten Britons said paying off debts was their biggest worry (12%) and new modern day pressures like not being able to keep on top of monthly bills (9%), paying the mortgage (9%) and life being increasingly unpredictable (13%) were all problems people felt they would faced with over the next few years.
 
Set against this, many of the major costs for the long-term were things that people worried the least about. Less than 2% of respondents worried about having to support their elderly parents financially, the prospect of negative equity or the future cost of school or university fees.

Commenting on the research, Andrew Harris, Director at rplan, said:

“It can be difficult to think about financial plans for the future when life is throwing up so many challenges on a daily basis.  A lot of people are reacting to change having to cut their budgets on a monthly income that is decreasing in real terms.

"In this market everyone needs to have a financial plan so long term needs and goals can be balanced with short-term priorities. The rplan website helps people to find out how much their future plans will cost and they can update them as their situation changes.

"Also, rplan’s new rebate policy on investment charges means people that set up financial plans through us stand to save thousands in commission, which can go some way to help offset the disposable income shortfall that UK households are currently experiencing.”