Recent research from RCI Bank, the digital savings bank, has found that 74% of UK adults who aren’t confident about reaching their financial goals this year think the biggest barrier for them to do so will be the rising cost of living. This comes as the latest ONS figures released in December 2021 showed an annual inflation rate increase to 5.4%, with expectations of another rise when the January figures are released on Wednesday.

In addition to the rising cost of living, other reasons people aren’t confident they’ll achieve their goals this year are that they are in too much debt (22%), they are finding it difficult to manage their spending (18%), and the lack of support from the government (17%).

Despite this, the number of people making financial plans this year is almost four times higher than last year (67% vs 17%), as consumers want to put more money into savings (35%), spend less money (32%), review their finances more frequently (19%) and increase their financial knowledge (11%). On average UK adults hope to save up to £6,767 in the upcoming year, with 10% wanting to save between £2,001- £3,000.

Two fifths (40%) of those who made financial goals last year saved on average £3,372 ** more than they planned. The top ways people managed to save more last year included making a budget for the year (38%), setting up a clear savings goal (35%),and recording their outgoings to see where they could make savings (32%). Others made sure they paid off their debts before they started saving (27%), researched savings products to get the best rates possible (26%), and set up a standing order to pay into a savings account regularly (24%).

Tafari Smith, Head of Savings at RCI Bank comments: “Despite the current economic pressures, it is positive to see so many more people are making financial plans this year. It is encouraging to see more UK consumers are more in touch with their finances, however, for some it is likely drawn out of necessity. Our research shows that what helped people achieve their goals last year was having a clear budget, setting up clear goals, and keeping track of their finances.

“Just earlier this month Ofgem announced the steepest increase ever in household bills, a 54% increase in the energy price cap, leaving 22 million households out of pocket. In the current inflationary environment and as the cost of living continues to rise, saving may not be a priority or even possible for everyone right now – but engaging with your finances where possible is always a positive step to take.”