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Cash Happy 2015

Posted on 3 August 2015

Read the 2016 cash happy report

 

Does money make us happy?

In our first ever Cash Happy report – a study focusing on the nations' spending and saving habits –SunLife reveals that money does make us happy; at least, having some spare cash each month to spend however you wish does.

SunLife surveyed 3,388 people responsible for household financial decision making and found a strong link between spare cash - money a household has left after all regular outgoings are taken care of - and happiness1.

The research revealed that, on average, UK households have £381 spare cash a month – which equates to £166 per adult each month2, or £38 a week per person.

SunLife also found that (after all other influencing factors on happiness were removed) UK households need £713 in spare cash per month or £71 a week to be amongst the happiest 10% in the UK.

This shows that, although not attainable for everyone, being cash happy is much more achievable than people may think. Instead of striving to be a multi-millionaire, on average we need to find an extra £33 a week – less than £5 a day – in spare cash to be among the happiest in the UK.

About the report

Every Autumn, SunLife releases ‘Cost of Dying’, a well-established study which tracks changes in funeral costs over time. Cost of Dying is widely recognised sector-leading research and over its eleven year history, it has made important inroads in highlighting the benefits of funeral planning.

Following the success of Cost of Dying, this year, SunLife has commissioned Cash Happy, a new research report that tracks trends in the nation’s spending and saving habits. Cash Happy, which will be released on an annual basis, will focus particularly on discretionary income and the impact it has on overall happiness and wellbeing.

The cost of happiness

The Cash Happy study found that the average monthly household take-home pay in the UK is £1,970.

Out of this comes rent (average of £433) or mortgage (average of £450), loans (average of £250) or credit card payments (average of £120) and other regular monthly payments.

Then there are all our other monthly costs such as transport, clothing and food – at the end of which, the average spare cash per is £381 a month per household. Per UK adult1, that becomes £166 a month, which is £38 a week.

This means that on average, 81% of the money we earn is already earmarked for our regular outgoings, leaving just one pound in every five we earn as ‘spare cash’ to spend however we want.

But that it still enough each week to take the family bowling, get a takeaway for four or to take a trip to the cinema and enjoy some popcorn!

Infographic popcorn

 

The survey reveals that, the more spare cash we have, the happier we are, however, the rate of the increase in happiness appears to slow down once average happiness is reached, which means being ‘cash happy’ is more realistic than people may think.

Graph - Spare cash vs Happiness

 

In fact, after all other influencing factors on happiness were removed, we need £71.54 a week – that’s £10.22 a day – in spare cash to be among the 10% happiest in the UK.

Table - Happiness vs spare cash

 

Dean Lamble, SunLife’s Managing Director commented:“Our research shows that having spare cash – money that you haven’t already got earmarked – is really important for happiness. Perhaps the bigger story here is that it shows how beneficial it can be to budget, to try and give ourselves a bit left over at the end of every month. It also shows that financial happiness could be more attainable for many people than they might think, with the average person needing to find an extra £33 a week – less than £5 a day – in spare cash to be among the happiest in the UK.”

Where to find happiness

SunLife’s Cash Happy survey discovered that although incomes are highest in London and the South East, outgoings are higher too, so they have less spare cash. In fact, Londoners have an average of just 17% of their income as spare cash, below the national average of 19% and well below that of the happiest people – the Scots – whose spare cash accounts for almost a quarter (23%) of their income.

Meanwhile, the least happy were people in the East Midlands who also have one of the lowest levels of spare cash in the country.

The UKs spare monthly cash
Table - spare cash

 

Perhaps unsurprisingly, ‘Keeping up with the Jones’s’ seemed important too: regardless of region, those who thought they had more spare cash than their peers were happier than those who believed they had less.

Effect of comparing your spare cash with your peers:

Table - Perceived status

 

Happy planners

As well as having spare cash, SunLife’s Cash Happy report also found that how we spend our money can make us happier too – and it’s not about simply ‘buying more stuff’.

For example, those with insurance and pensions are much happier than those without, even if this means they have less money left over as a result. Those with a private pension were happier than people who just had a pension provided by their employer. Saving had a significant effect too; putting some money aside for a rainy day contributed to people’s overall happiness.

Effect of pension on happiness:

Table - pension

 

Effect of savings on happiness:

Table - Effect of savings on happiness

 

The report also found that those who budget– whether it is formally or informally – are happier than those that don’t, with the happiest people budgeting via an online tool.

Table - Budgeting

 

Conclusion

Dean Lamble, Managing Director at SunLife concludes: “This research is really encouraging, showing how we can budget to have more spare cash and so be happier. In fact, our Cash Happy report shows that the happiest people in the UK also formally budget, and check their bank balance regularly.

“They ensure they have some ‘spare cash’ to spend however they wish, and generally they are happier when they have savings and insurance in place. The good news is out: you don’t need to be a millionaire for money to buy you happiness.”

Dean Lamble

 

Notes

1To calculate happiness, respondents were asked the following three questions and asked to scale them between 1 and 10, with 1 being not at all satisfied/happy and 10 being extremely satisfied/happy:

  1. All things considered, how satisfied are you with your life as a whole nowadays?
  2. How happy did you feel yesterday?
  3. Thinking forward to the next 5 years or so, how happy do you feel about your future?

The results were then combined in a statistical modelling process called a factor analysis, to give an overall happiness index scaled from 1 to 10.

2Based on 2.3 adults per household, according to the ONS.

About SunLife:

SunLife rebranded in 2014 but has been around since 1810, making it one of the oldest financial services companies in the UK. The company is a direct-to-consumer financial services provider, offering a range of straightforward and affordable products across insurance, savings and protection.

SunLife’s customer satisfaction score is 97%*. It was the first company in the UK to offer life assurance without a medical and is the market leader in over 50s plans**.

SunLife also conducts regular, rigorous research across financial services and the later life market, and owns the annual ‘Cost of Dying’ report which has been one of the most significant pieces of ongoing research in its field for the last five years.

The company’s ambition is to ‘democratise financial services’ – giving everyday customers access to products that can give them a brighter financial future.

*SunLife new customer satisfaction survey, rolling 6 monthly performance figures, surveys Mar – Aug 2014 for policies taken out between Dec 2013 – Mar 2014.

**Most popular whole of life guaranteed acceptance plan bought directly. ABI statistics up to 31st December 2014.

Survey consisted of 3388 on line interviews among UK adults aged between 18 and 70 undertaken by Charterhouse Research between 26th March and 22nd April 2015

Here's the information that you need to know about who we are and the other companies that we work with in order to provide our products and services.

Who are SunLife? 

Phoenix Life Limited trades as SunLife and is the provider of the Guaranteed Over 50 Plan, SunLife Insurance and the life insurance policy payment option for Funeral Plans. Phoenix Life Limited’s registered office is at 1 Wythall Green Way, Wythall, Birmingham, B47 6WG (registered in England, no. 1016269). Phoenix Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority and is entered on the Financial Services Register (registration no. 110418). As part of SunLife’s commitment to quality service and security, telephone calls may be recorded.

SunLife Limited distributes financial products and services and is a company limited by shares, registered office: 1 Wythall Green Way, Wythall, Birmingham, B47 6WG (registered in England, no. 05460862). SunLife Limited is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register (registration no. 769427).

You can contact us by post at SunLife, PO Box 1395, Peterborough, PE2 2TR or by phone on 0800 008 6060.

If you choose to add Funeral Benefit Option to your Guaranteed Over 50 Plan the funeral services are arranged and provided by Dignity Funerals Limited. Dignity Funerals Limited is a company registered in England and Wales No. 00041598. VAT registered No. 486 6081 14. 4 King Edwards Court, King Edwards Square, Sutton Coldfield, West Midlands, B73 6AP. Telephone No. 0121 354 1557. Fax No. 0121 355 808. Part of Dignity plc. A British Company. Dignity are not regulated by the Financial Conduct Authority or the Prudential Regulation Authority but are registered providers with the Funeral Planning Authority.

Who provides the Funeral Plans?

The funeral services are arranged by a funeral director selected by Golden Charter Ltd. Golden Charter Ltd are not required to be authorised or regulated by the Financial Conduct Authority or the Prudential Regulation Authority in relation to funeral plans but are registered providers with the Funeral Planning Authority.

If you choose to pay for your funeral in one go, with a single payment, you will have a contract with Golden Charter. The funeral services will be arranged by a funeral director selected by Golden Charter Ltd.

If you choose to pay for your funeral with a life insurance policy, the policy will be provided by Phoenix Life Limited, trading as SunLife. The funeral services will be arranged by a funeral director selected by Golden Charter Ltd.

Who provides My Smarter (ISA)?

My Smarter (ISA) is provided by Scottish Friendly Asset Managers Limited. Authorised and regulated by the Financial Conduct Authority. Details can be found on the Financial Services register, registration No. 188832. Member of The Investment Association. Registered Office: Scottish Friendly House, 16 Blythswood Square, Glasgow G2 4HJ.

Who provides the Will writing services?

Hugh James is authorised and regulated by the Solicitors Regulation Authority (SRA Number:303202).

The information contained on this website is based on Hugh James' understanding of the law of intestacy in England and Wales only as at April 2014. The law in Scotland and Northern Ireland is significantly different. This is for information purposes and is not intended to be legal advice.

Who provides Family Life Insurance?

SunLife Family Life Insurance is provided by Scottish Friendly Assurance Society Limited which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Details can be found on the Financial Services register (registration number 110002). Registered Office: Scottish Friendly House, 16 Blythswood Square, Glasgow G2 4HJ. 

Who provides SunLife Pet Insurance

SunLife Pet Insurance is arranged and administered by BDML Connect Limited. BDML Connect Limited is authorised and regulated by the Financial Conduct Authority (No. 309140). Registered in England and Wales Number 02785540. Registered Office: 45 Westerham Road, Bessels Green, Sevenoaks, Kent, TN13 2QB.

Who provides SunLife Home Insurance

SunLife Home Insurance is arranged and administered by BISL Limited and underwritten by a panel of insurers. BISL Limited are an intermediary authorised and regulated by the Financial Conduct Authority. Registered in England no. 03231094. Registered office Pegasus House, Bakewell Road, Orton Southgate, Peterborough PE2 6YS.

Who provides SunLife Car Insurance

SunLife Car Insurance is arranged and administered by BISL Limited and underwritten by a panel of insurers. BISL Limited are an intermediary authorised and regulated by the Financial Conduct Authority. Registered in England no. 03231094. Registered office Pegasus House, Bakewell Road, Orton Southgate, Peterborough PE2 6YS.