More than half, 52%, of UK workers admit to feeling regret about their spending within a week after payday.
Recent research from Standard Life, a part of Phoenix Group, shows that 21% of those regretting such spending experience stress and anxiety. Additionally, 19% run out of money by month-end, while 12% can’t afford essentials. Some express regret due to other potential uses, 32%, or view it as an unwise expenditure, 27%.
The major contributors to non-essential spending are dining out, 50%, clothes shopping, 48%, takeaways, 42%, hobbies and activities, 39%, socialising, 34%, and subscriptions, 32%.
Analysing spending habits, men are more inclined to spend on nights out, 39% vs. 28%, and gadgets, 19% vs. 7%. In contrast, women prioritise clothes, 57% vs. 40%, takeaways, 46% vs. 39%, and beauty treatments, 29% vs. 8%.
Although men and women allocate a similar percentage of their pay to non-essential items, 15% each, women are slightly more prone to regret such spending within the first week after payday, 55% vs. 49%.
Standard Life managing director for individual retirement Claire Altman says: “As we navigate a tough economic landscape, it is easy to understand why UK workers are increasingly dealing with feelings of regret, anxiety, and stress when it comes to spending money on non-essential things after payday. While it’s clearly important that people spend money on what makes them happy, improved education on the benefits of long-term saving is essential to ensure people make informed decisions that give them certainty and security about the future.
“The benefits of financial security cannot be underestimated during this unpredictable time, and annuities can act as a similar regular payday long after you’ve retired, providing peace of mind through a regular guaranteed income that lasts as long as you do.
“Furthermore, by getting advice or guidance to help combine an annuity with other retirement income solutions like drawdown can give people the best of both worlds. This can provide both security and certainty knowing you have enough to cover your essential costs, while also keeping money invested and flexible, to help cover any non-essential spending.”
