But it’s also about balance. Even if your clients have their money building blocks nailed, they won’t achieve optimal levels of financial wellbeing without a well-considered and focused mindset too.
What was clear from our research was that mindset scores were lower than money scores, and the scores did not improve much the higher peoples’ incomes were.
Find out what our research tells us about each building block
The UK’s financial wellbeing score
Our research gave us a really interesting insight into the UK landscape and we wanted to quantify our findings into something more concrete. Out of this our Financial Wellbeing Index was created.
What we found could change the way clients look at money, for the better. People with the best financial wellbeing scores did well in both money and mindset blocks.
'The best possible combination is to be what we call the 'all-rounder'.'
All money and no long-term plan for happiness was no better overall for financial wellbeing
than no money and all plan. On average, people in the UK fall somewhere in the middle of having good money and good mindset building blocks.
So what is an ‘all-rounder’?
All-rounders are very financial comfortable and can enjoy life now whilst planning for the future. They balance the importance of money and mindset well and are ready for what the future holds.
But only 18% of people are here already.
How to help your clients be an ‘all-rounder’
Recognising where your clients are on this scale could help identify ways to help them. Improving the UK’s financial wellbeing means working together on the essentials:
- Ask them to focus on how/why they spend – do they spend to satisfy a need? Are there cheaper ways to satisfy the same need? This isn’t about asking them to justify what they spend their money on but to draw more focus on money in and money out as it might help them to rebalance the scale.
- Teach your clients how to think long-term – this plays a big part in achieving financial wellbeing. Experts have calculated people need to put away closer to 15% a month (including employer contributions).1
- Ask them to describe their joy and purpose – things your clients do to relax (joy) and things they do to feel competent, engaged or useful (purpose). Tuning into this can also help them focus on how/why they spend money.
- Encourage them to think about their future self – who are they, where are they, what does their future look and feel like. If you can’t see or feel it too, it’s not concrete enough.
Tools to support you
Our in-depth digital flipbook explores our research even further and provides clients with recommendations to help them think and act positively about their future - going deeper than budgeting tools and savings rules an shows how financial wellbeing is possible for everyone.
We’ve also created our summary of our insight into the nation’s financial wellbeing – just for advisers and employers.
Plus our financial wellbeing tool and Picture your best life tool can help your clients identify areas of their financial wellbeing you can work on together.
Find out more about financial wellbeing at aegon.co.uk/financialwellbeing.