Around two in five (41%) UK adults expect their financial situation to worsen over the next 12 months, which is equivalent to 21.3 million people, according to research by StepChange Debt Charity.
The debt advice charity surveyed 2,000 adults in the UK, excluding Northern Ireland, and found that 17% of adults ‘always' worry about money, while 59% ‘often' or ‘sometimes' worry about money. Of those worrying about money, 53% were worrying more now than they did one year ago.
The primary drivers of this sentiment were meeting the cost of living and higher energy bills. Specifically, 59% of those expecting their finances to get worsen said that this is due to higher energy bills from January 2025.
StepChange found that certain demographics were more affected than others, including parents of children (42%) who anticipated that their financial situation would worsen in the coming year. Over half (54%) of these respondents said they worry more about money now than they did one year ago.
Additionally, women were more likely to feel the financial strain; 58% said they worried more about money than they did one year ago, compared to 48% of men.
Vikki Brownridge, chief executive officer, StepChange Debt Charity, said that millions of people across the UK are feeling the weight of financial uncertainty.
"What's concerning, is how many are facing worries about their finances going into 2025, even more so than this time last year. These challenges are not temporary. They reflect the long-term financial pressures many are facing and without the right support, it's only going to get harder for people to manage their finances," Brownridge added.
"We know that debt is often a consequence of these mounting pressures, and for many, seeking help as early as possible can make a significant difference."
Financial resilience
While StepChange Debt Charity identified negative sentiment towards finances, LV= found growing financial confidence for UK workers.
According to LV='s third Reaching Resilience report - which surveyed 2,720 UK workers - 69% felt financially resilient, which is up from 65% in 2023, while around half reported that the right protection would further their sense of resilience.
Specifically, 77% of respondents who are parents of young children said they felt secure, which is up from 63% in 2022, and 79% reported feeling more resilient than one year ago.
LV= said its findings indicate a shift in outlook as people continue to "successfully" navigate external pressures, such as the cost-of-living crisis and economic conditions.
However, there were still gaps in financial protection despite rising confidence as 48% of adults lacked any form of protection cover.
Half of workers surveyed said they would feel more resilient with insurance that covers monthly outgoings during illness and injury, and a similar number believed a lump-sum pay out for serious illness or death would boost their financial confidence.
Mike Farrell, protection sales and marketing director, LV=, said: "This is a significant moment, and with increasing optimism, people are rethinking their financial priorities.
"Our research has revealed this as an ideal time for advisers to have meaningful conversations with their clients about the importance of protection. Whilst it's encouraging to see financial confidence on the rise, our findings show that the right protection could further strengthen this sense of security."
