Auto-enrolment and its relationship to financial wellbeing Last year we carried out research looking at how people think about money and its relationship to their financial wellbeing. This research found that we all need a combination of money building blocks and mindset building blocks to build positive financial wellbeing. This means in order to achieve optimal levels of financial wellbeing, regardless of income level, financial commitments or life stage, it is crucial to have a focused and well considered mindset too. Money Building Blocks – paying for what makes us happy, now and in the future Building block What it means Why it matters Income Covering costs of living and things that make us happy here and now. About 3 in 10 of us have less than £50 left at the end of the month. Long-term savings Covering the costs of living, our future goals and things that will make us happy in the future. Half of the UK aren’t saving enough to afford a comfortable retirement come State Pension age. A strong safety net Ideally a minimum of three months of our income in an easy access savings account. 27% of people could only live off their cash savings for less than a month if they lost their jobs. Debt Keeping debts at a level our income can comfortably pay for while leaving enough to live. Debt can be managed and repaid with some long-term planning but 11% of people owe ‘too much’ debt in relation to their income. Assets Owning property and other fixed assets can build financial security into our lives. People still renting when they retire have much less spare cash than those who own their home. A decade of auto-enrolment: has it helped or hindered saving psychology? 11
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