Happiness hits record lows despite a wealth boost

Half the nation re-evaluated their relationship with money during the pandemic year

‘There is reason for optimism looking forward’ says the chief executive of the CEBR (Getty)

The UK’s personal wealth has bounced back to its highest levels since before the pandemic began, but our happiness and health have plummeted, according to new figures that track the interplay between our emotional and financial sentiments.

Unsurprisingly, the health, wealth and happiness of the UK population reached their lowest levels in a decade in the second quarter of 2020, as the events of the last year provided the most dramatic shifts in sentiment since the record lows of the financial crisis.

With a dramatic split between those who are financially better off since the pandemic and the quarter of people who are worse off, the last year has prompted more than half the UK population to re-evaluate their financial affairs.

More than three-quarters of those under 34 have taken drastic action, including coming down hard on discretionary spending, upping savings, paying off debts and even anticipating tax rises.

But these actions aren’t reserved for those facing job losses and squeezed incomes.

Almost a third of Britons already earning more than £50,000 have overhauled their savings, according to the Health, Wealth and Happiness (HWH) Index, produced by think tank the Centre for Economic and Business Research (CEBR) and insurance broker LifeSearch, whose chief marketing officer described the findings as “loaded” and “emotive”.

That’s because while our financial confidence returned strongly in the first three months of this year, our health and mental health – despite having an intimate relationship with our financial circumstances – are still dropping.

One in three Britons feel less healthy now than they did pre-pandemic, with comfort eating and alcohol intake continuing to rise and fitness levels falling.

As Mental Health Awareness Week continues, the index shows the effect of working from home – and often doing overtime, for which few are adequately paid – has obliterated the work/life balance, regardless of the additional 44 minutes per day the average adult clawed back from the commute to spend on leisure and entertainment.

Separate survey data published by YouGov points to considerable spikes in the proportion of the UK population unsurprisingly experiencing stress, fear, sadness, and apathy during the pandemic.

But only 14 per cent of adults have worked to improve their wellbeing in the last year, and only 9 per cent have sought professional counselling.

The nation’s health and happiness are now at a record low not even seen in the middle of 2020’s harshest lockdowns.

The strange mix of improved finances but poorer health and wellbeing is a familiar one for Charlie Gray, 31, from Leeds.

“Over the last year I have managed to save around £10,000,” she says, thanks to lockdown changes in spending on clothing and socialising as well as actively deleting shopping apps from her phone.

“Having saved so much money is amazing, but in regard to health and happiness it hasn’t made a difference.

“I know that being able to save that amount of money in one year is a great achievement but the impact of not seeing my friends or family, not being able to socialise… I would take that over the amount I have saved.”

“There is reason for optimism looking forward,” assures Nina Skero, chief executive for the CEBR.

“Given the continuing vaccine rollout and roadmap for easing restrictions, CEBR anticipates a return to economic growth, with quarterly GDP expansion of 4.5 per cent and 4.2 per cent 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 per cent in the final quarter of 2021, and thus putting some pressure on individuals’ livelihoods.”

Almost half of UK adults are now less happy than they were a year ago. But while that isn’t exactly unexpected, it does seem to be UK-specific.

The 2021 World Happiness Report found the UK fell five places to 18th on the global list as we experienced one of the most dramatic drops in national happiness compared with other nations.

Elsewhere, the report’s authors found greater resilience and, overall, little change in happiness levels compared with last year, with countries like the US only falling a single place, and Finland remaining in the top spot for the fourth year in a row.

The report put this resilience down to a rapid and strong social support response by various governments – particularly those in northern Europe. But even with the UK’s furlough scheme, for example, having emerged as one of the most generous, Britons are still struggling.