What are your top financial priorities for 2023? Given the steep rise in the cost of living, almost three quarters of UK adults say they’re re-evaluating their finances for the new year – and we’ve surveyed thousands of consumers to understand how. Read on to find out more, and to check our five tips for managing your finances through the rising cost of living.
Financial priorities in 2023
According to our survey, the most important thing to UK adults when it comes to their finances is not having to worry about money. A desire for financial security is also reflected in other top priorities, such as avoiding debt and having emergency savings.
We asked 4,000 UK adults to rank the importance of various financial priorities. Would you rank these statements differently?
As we head into 2023, UK adults aren’t only talking the talk about their financial wellbeing – they’re walking the walk too. Our survey found that the three most common financial habits aim to avoid debt, build savings and manage money more efficiently.
aren’t borrowing money unless absolutely necessary
maintain a certain amount in savings to use in case of an emergency
manage their finances digitally e.g. using a mobile banking app
High proportions of UK adults say they’re planning to spend less (46%), save more (29%), and pay off debts (15%) this year. If you’re struggling for inspiration, bear in mind our five top tips.
Review your budget
This one comes as no surprise. But just as you refresh your gym routine from time to time, your financial routine needs regular attention too.
Reviewing your budget every couple of months can help you spot where you’re putting yourself under strain and where you might be too lax.
Ask yourself: Am I happy with my discretionary spending? Should I update how much I’m saving and investing? What are my goals, and what small gradual steps can I take to get there?
For more budgeting inspiration, read our guide to four budget planning methods.
Cancel subscriptions... or start new ones!
While cancelling unwanted subscriptions is an easy win for saving money, consider if new subscriptions for other items could offer better value.
Newspapers, coffee, even razors can be bought on subscription nowadays. Identify your consistent expenses and check if there’s a subscription that could make you a saving in the long run.
Saving is still important
With the rising cost of living, it’s important to monitor all discretionary outgoings – including how much you can save.
Where possible, saving is a good habit to keep in challenging times too. Building an emergency fund could help you tackle unexpected future expenses. Even if you can’t make additional deposits at the moment, keeping any existing cash in savings still lets you benefit from the magic of compound interest.
Check your money is where you need it, when you need it
Consider if the types of accounts you hold still meet your needs. You might choose to hold more of your savings in an easy access account, so you can withdraw them easily when you need them. Or if you’re happy with the amount of cash you have readily available, you might decide that you can afford to save in a fixed term account, where it could potentially earn a higher rate.
Check you’ve got the right balance to best suit your current needs.
Make the most of perks and allowances
Savings can come in unexpected or overlooked places too. One example is the annual ISA allowance. While your savings are in a valid ISA, the interest you earn on them there is tax-free, which might save you money in the long run. Remember that any unused allowance can’t be carried from one tax year into the next, so if you don’t use it, you lose it. Learn more about maximising your ISA.
You can find more information about best practices for saving and budgeting on our news and insight page.
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We have prepared this information with care but it is not intended to be exhaustive. The statistics featured in this article are taken from two surveys we conducted with Opinium: the first of 4,000 UK adults in September 2022, and the second of 2,000 UK adults in November 2022. To identify respondents' most and least important priorities referenced in the section 'financial priorities in 2023', we conducted a ‘max diff’ experiment which asked respondents to select the most and least important factors from different lists of variables. It then revealed the relative importance of each factor for the total population surveyed based on the extent to which the factor was selected on a scale of most to least important within the overall study.
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