EXCLUSIVE INTERVIEW
Thomas Mathar Centre for Behavioural Research Aegon
Your recent research must have produced incredible amounts of data . What were your headline findings ?
Absolutely , the research we gathered was very wide ranging , but we have distilled our key points to these four :
1 . Wealth worries remain for even those with higher incomes . More than half ( 55 %) of average earners and one in three ‘ top earners ’ worry about money .
2 . People on high incomes are more likely to have considered what makes them happy than low earners . However , across the board , only a small minority were able to identify what brings them joy and purpose in life .
3 . The ability to contribute a large amount into their pension doesn ’ t depend solely on how much an individual earns . Their ability to concretely picture their ‘ future self ’ also plays a role . A low earner who holds a specific vision of their future is likely to contribute a larger percentage of their earning to their pension than a high earner with a vague image of their future .
4 . Only 4 % of those with a vague picture of their future selves have thought about how to make their financial goals realities . When you compare this figure to those who do have a firm picture of their future self – 33 % - you can see that the more definite and specific an individual ’ s image of their future self , the lower their debt-to-income ratio becomes .
TA : An individual ’ s attitude to their financial wellbeing and resilience seems like a huge area into which to delve . How did you approach assessing them ?
TM : In order to help us create a snapshot of an individual ’ s position , we used a Financial Wellbeing Index which gives people a rating out of 100 , based on their success within each of our financial wellbeing building blocks . These are scored with a maximum of ten points for each of the following blocks :
Financial Building Blocks 1 . Income 2 . Rainy day fund 3 . Manageable debt 4 . Smart long-term savings 5 . Valuables that make us feel safe long-term , like property
Mindset Building Blocks 1 . Knowledge of what makes us happy 2 . A solid picture of our future self 3 . Savvy social comparisons 4 . A long-term plan 5 . Strong nerves / resilience in a crisis
And can you tell us a little about your findings ?
As you may expect , people who had the very best overall wellbeing ratings scored equally highly across the ‘ Money ’ and ‘ Mindset ’ Building Blocks , suggesting a balance in their relationship with their finances . We found a mental focus on what makes us feel happy and useful ( our joy and purpose ) plus a plan to achieve that now and in the future was a much stronger indicator for financial wellbeing than overall wealth . Our findings , and what they mean , can be best summarised in the following descriptions .
High
Money building blocks
Low
Distracted
2 %
‘ The wealth accumulator ’
6 % ‘ The spender ’
12 %
‘ Challenging circumstances ’
13 %
‘ The strategist ’
18 %
‘ The Economist ’
18 %
‘ Modest means ’
Mind building blocks
16 %
‘ All-rounder ’
10 %
‘ Comfortably off ’
4 %
‘ The Striver ’
Focused
16 | the adviser