Some 42 million affected by poor understanding and control of their finances, report shows

News - Savings

Written by Ray Clancy

Wednesday, 07 July 2010 09:19

Poor understanding and control of personal finances is damaging the well being of up to 42 million adults in the UK, from high-level managers to low earners and pensioners, says a new report by AXA.

Millions of managers and workers are failing to take financial advice even when falling victim to money worries, a growing scourge in the current economic climate.

This is despite the fact the harmful effects of financial troubles on the nation’s health are increasing at a disturbing rate, according to new research commissioned by AXA.

Few are immune to the spread of what it described as Money Sickness Syndrome, with nearly nine out of 10 adults suffering physical and psychological symptoms caused by money concerns and as many as two thirds experiencing increased levels of stress in the last 12 months.

The syndrome is spreading across the working classes and right through Middle England, with everyone from unskilled workers and pensioners to middle and high level managers and professionals complaining of symptoms, ranging from anxiety, weight gain, depression, sleeplessness and a decline in sex drive.

Over the past 12 months 63% of adults have felt their financial stress increase, the AXA report reveals. The hardest hit were those in junior managerial and supervisory jobs, with 66% complaining of rising stress levels over money in the last year.

However, one in five, 21%, of high level managers and professionals complained of suffering constant money related stress, more than any other group and double the number of skilled manual workers. They were also the least likely to seek the help of an independent financial adviser.

Most blame the rising cost of living and bills for these woes, which are only likely to persist as economic upheaval, job uncertainty, the high cost of living and tax rises continue to blot the money landscape. High level managers worried most about the cost of living, followed by bills and debt repayments.

Mortgage repayments, while an important concern for many, were not as strong a stress factor as the high cost of living, bills and other debt repayments, possibly because mortgage rates remained low over the period. The exception was for high level managers, 22% of whom blamed their home loan payments for their money stress, compared to 14% of skilled manual workers.

The number affected by Money Sickness Syndrome has doubled since 2006, when GP and leading mental health expert Dr Roger Henderson first coined the term.

Whilst 36% have taken some practical action to deal with the underlying problem, a quarter have done nothing to escape their financial mess. Instead, many choose to seek consolation by increased drinking, eating or smoking. Just 3% sought the help of an independent financial adviser and the same percentage a debt counsellor.

‘People in the top socio-economic classes are just as likely to experience it as those at the bottom and all age groups are affected. For some people it may be the issue of making ends meet that is the problem but for others symptoms emerge from worrying about how to maintain a lifestyle that includes school fees and several foreign holidays,’ said Henderson.

The report points to common warning signals that suggest it is time to exercise greater financial caution and perhaps consider seeking expert independent financial advice. These include being near the limit of your credit, being able to make only the minimum payment on a credit card and paying bills with money earmarked for something else.