Health, Wealth and Fulfilment in the Past Year
How was your health, wealth and fulfilment affected by the events of the past year?
According to new research, the UK’s health, wealth, and fulfilment fell to their lowest level in a decade at the onset of the pandemic last year.
The latest LifeSearch Health, Wealth & Happiness Index, compiled in conjunction with the Centre for Economics and Business Research (Cebr), looked at changes in the three measures individually and combined.
As the economic impact of the Covid-19 pandemic was felt in our wallets and bank balances, there was a significant decline in the wealth index in 2020. This Index fell to 79.5 in the second quarter of last year, before falling again to 76.3 in the third quarter.
While still not as low as the levels experienced back in 2011 when the Index fell to 66.4 following the European sovereign debt crisis and its impact on global stock markets, it remains a significant decline in this measure of wealth.
While the government has managed to keep levels of unemployment low through its furlough scheme, a sharp decline in wage growth placed downward pressure on the wealth index.
However, the household savings ratio reached a record high of 25.9% in the second quarter due to restrictions on spending, and a strong performance from the stock market and house prices also helped to soften falls in the wealth index.
The wealth index recovered to 83.6 in the first quarter of this year, thanks to more robust earnings growth and asset prices.
At a more granular level, the research also found that the impact of the pandemic on household finances is very much divided across the country.
29% of British households feel better off financially than before the pandemic, but 24% feel worse off.
The pandemic has prompted people to reevaluate their financial situation, with 56% of those surveyed saying they took a closer look at their household finances due to the pandemic.
24% of Brits have saved more money, 21% have reviewed their spending more closely, and 9% have paid off debts.
Only 5% of those surveyed said they have reviewed their home or motor insurance policies during the pandemic, and 4% have taken out life assurance policies.
Emma Walker, Chief Marketing Officer at LifeSearch who commissioned the study, said:
“In living memory, matters relating to our nation’s health, wealth and happiness haven’t felt so loaded or emotive. We created a new Index to document this period and lock the UK’s health, wealth and happiness trends into history. The result is a major new addition to the socio-economic conversation that will be tracked long into the future.
“While the Wealth Index experienced steep falls in the last year, it hasn’t yet reached a record low, but we may still have that yet to come in the months ahead and this is reflected in the fears that consumers shared with us from job insecurity through to rising bills and savings taking a hit.”
Turning to our collective health, the pandemic has a national health crisis.
The health index stood at 74.7 in 2020, its lowest level in the past decade. This Index experienced its most significant year-on-year decline in the second quarter of last year, falling by 49% as Covid-19 took its toll.
A key driver for this decline in the health index was the death rate, but some aspects of our health experienced a moderate improvement. For example, sick leave fell during most of the year, and the number of GP appointments was down by 31% at the height of the pandemic, with A&E admissions down by 57% on an annual basis.
The study found that 29% of Brits feel less healthy now than they did before starting the pandemic, but 25% feel healthier than they did before.
36% of those surveyed said they have been comfortable eating more in the past year, and 21% have consumed more alcohol.
However, with the closure of pubs and bars, 27% say they have drunk less. 34% of Brits feel they are less fit now than pre-Covid, but 25% feel fitter.
On our mental health, the research found that 39% of adults say this has declined, with only 14% claiming their mental health has improved.
A key driver behind mental health for many is work-life balance.
The study found that 57% of Brits have worked from home at some point in the past year, creating additional time for entertainment and leisure, an average of 44 minutes a day more free time.
The study also found that more adults now believe their work-life balance is improved, at 63% in 2021 compared with 59% in 2019.
Nina Skero, Chief Executive at Cebr, said:
“When thinking about the past year, health, wealth, and happiness are not the first words that come to mind for most, yet there is reason for optimism looking forward. Given the continuing vaccine rollout and roadmap for easing restrictions, Cebr anticipates a return to economic growth, with quarterly GDP expansion of 4.5% and 4.2% expected for Q2 and Q3, respectively. The combination of these factors is set to drive improvements in health, wealth, and happiness.
“Nevertheless, there remain considerable downside risks. One of the more significant near-term developments will be the upcoming tapering of the furlough scheme, which is set to be fully withdrawn at the end of September. Cebr expects this to be accompanied by an uptick in redundancies, resulting in a peak unemployment rate of 6.5% in the final quarter of 2021 and thus putting some pressure on individuals’ livelihoods.”
On happiness, the Index experienced significant falls in 2020, with the year characterised by uncertainty and restrictions.
The happiness index fell by 9.5% in the second quarter of 2020 and reached a record low of 84.8, falling to a lower level than seen following the UK’s vote to leave the European Union.
In the first quarter of this year, the happiness index had fallen to a new record low of 76.4. Almost half of UK adults reported being less happy than they were a year earlier.
Drivers of happiness include spending time with family and friends, travelling, and having the freedom to go where they want.
Emma Walker concluded:
“With the backdrop of lockdown easing and the vaccine rollout ramping up across all adults, we are hopeful that we may see an uptick across the Index in the next quarter. At a granular level, we know from our study that consumers are still concerned about their finances this year. Now more than ever, it is vital for consumers to protect themselves
and their families from any financial shocks such as a loss of income from sickness, injury or death, to give them added peace of mind and security.”