More than one in three people believe they’re poorer than they were 12 months ago.
According to the Pensions and Lifetime Savings Association (PLSA), 34% feel less well off today, compared with this time last year.
While that’s an improvement on the 44% recorded in 2023, it’s still a worryingly high proportion of people feeling the sharp end of the cost-of-living crisis.
In fact, 39% of those polled said they’ve seen no change in their financial position over the last year, and just 27% have seen an improvement.
As a result, many are still being forced to make cutbacks or reduce their expenditure where they can.
For example, 52% said they’ve trimmed spending on dining out, and 49% are spending less on takeaways.
Meanwhile, 42% were found to have cut back on leisure activities.
People prioritising pensions
Even though many people are feeling the pinch, most are still – thankfully - looking at the bigger financial picture, such as their future retirement income.
According to the PLSA study, just 13% of people have reduced or cut private pension contributions, despite cutting spending elsewhere.
Similarly, only 11% had reduced or cut their workplace pension payments.
As the PLSA notes, this reflects “the importance people place on maintaining long-term savings for retirement, even amid short-term financial pressure”.
Inflation goes up to 3%
The rate of inflation rose to 3% in January 2025 – the highest level in ten months and up from 2.5% in December.
It was also higher than many economists had been expecting and above the Bank of England’s target of 2%.
Written by James Glynn
Senior Financial Content Writer
