Real Life Advice Report 2025: Chapter 4 – Cost of living pressures hit people’s financial plans

Cost-of-living pressures are forcing households to prioritise day-to-day spending at the expense of longer-term planning. As a result, an increasing number of people say they are losing confidence in their financial future.

The final chapter of the 2025 Real Life Advice report highlights the number of adults with no personal or financial ambitions for the next year rose from around one in 10 (13%) to one in five (21%) between July and December 2025.

And when thinking about the decade ahead, the number of those with no financial plans or aspirations rose from one in eight (17%) to nearly a quarter (24%). This widening “ambition gap” highlights a deeper challenge – when financial pressure becomes the norm, confidence in the future erodes, making long-term planning feel less possible for many households.

Shifting priorities

According to the RLA report, for four in 10 people (39%) the cost of living is the major concern over the next 12 months. This is followed by day-to-day affordability (20%) and setting aside money for emergencies (16%). Just four in 10 people said they were focusing on saving over the next year, while a quarter (23%) plan to travel more and  a fifth (19%) of respondents  are looking to reduce debt.

A longer-term view

Yet while day to day financial pressures have seen many people’s priorities narrow, as the time horizon widens, so too do people’s anxieties. Over the next decade, worries shift to longer-term pressures such as the cost of health or long-term care (14%). Many become more focused on retirement and what it will require (11%), whether they will be able to afford to stop working at all (8%), and fears about outliving pensions savings (7%) or becoming financially vulnerable (8%).

Behavioural drivers

But there are other factors that are driving financial behaviour across the UK, including the economic situation, changing government policy and emerging technologies.

As an example, in the months of speculation that preceded the 2025 Autumn Budget, almost a quarter of UK adults (23%) made changes to their finances based on fiscal rumours. A fifth of those who acted before the Budget regretted doing so.

Almost half (48%) of those who acted adjusted investment portfolios – moving into cash, delaying contributions or shifting into perceived safe havens such as gold or premium bonds. Meanwhile, a third (34%) changed their savings habits and three in ten (30%) altered pension arrangements, including withdrawing their tax-free lump sum early.

The data shows a clear behavioural pattern: when the world is more uncertain, people gravitate towards short term, reactive decisions which are typically at the expense of long-term planning.

The role of advice

Earlier chapters of the Real Life Advice report have highlighted the benefits of taking ongoing financial advice, not least in more turbulent times. The report has shown that advice boosts confidence and helps people stay aligned with their financial plans and goals.

Not only that but the research suggests another powerful benefit, which is that it broadens horizons and helps people move their focus from immediate pressures to longer-term planning. This can help people to build financial resilience.

According to the report, those receiving advice are more than twice as likely to include longer-term goals such as retirement funding in their 12-month horizon, with one in six (15%) compared to just 8% of those without advice.

This reflects broader behavioural patterns – more than two-thirds (68%) of people taking ongoing advice have a financial plan with clear goals and timelines. This is more than twice the levels seen among those not taking advice (32%).

In a volatile and uncertain word, advice can provide the structure and support for people to look beyond immediate pressures and plan for their future with greater clarity and confidence.

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Background

¹Opinium surveyed 8,000 UK adults nationwide between 22nd July and 5th August 2025. Quotas and post-weighting were applied to the sample to make the dataset representative of the UK adult population. Within this poll, the relevant weighted sub-samples were:

Men, women, other gender, 18-34, 35-54, 55+, Scotland, Northern Ireland, North East, North West, Yorkshire and Humberside, East Midlands, West Midlands, Wales, East of England, London, South East, South West, working, self-employed, student, retired, unemployed, other not working.