Cost of living crisis preventing financial milestones

Could the cost of living crisis stop you from achieving critical financial milestones?

A new poll by interactive investor found that 36% of consumers are worried about the impact of rising prices on their financial planning.

The poll of more than 3,000 website visitors found that 21% expect to delay their retirement plans due to surging price inflation.

A further 15% of respondents said they would not be able to pay off their mortgage on schedule, with 4% prevented from buying a house and 2% stopped from repaying credit card or loan debt.

A further 6% said higher prices would stop them from achieving another financial goal.

The most worries about rising prices stem from affordability concerns, with 36% pondering the rising cost of energy and 17% concerned they will be unable to afford leisure activities and entertainment.

The rising cost of fuel and food was cited by 10% and 8% of respondents, respectively.

However, the cost-of-living crisis was the second most significant threat to finances among the sample, with almost a third of respondents citing this.

In first place was fears of a stock market crash, with 50% of respondents reporting this worry.

An economic recession was in third place, reported by 10% of those taking part in the survey as a significant concern.

Myron Jobson, Senior Personal Finance Analyst, interactive investor, said:

“The spiralling cost of living has forced many consumers to put the champagne on ice after coming tantalisingly close to reaching a financial milestone. Runaway inflation means that consumers face an uphill battle to keep up with day-to-day expenses – let alone to edge closer towards achieving long term financial goals.

“Those who were contemplating retirement in particular have been hit by a double whammy of ballooning inflation and stock market underperformance, forcing some to remain in employment. There is little reprieve for retirees in waiting with higher prices set to be the status quo for some time, and the cost-of-living squeeze set to intensify amid inflationary pressures from the ongoing Russia-Ukraine war, pushing retirement further out of reach for many.

“For the majority of the sample, the inflationary pinch is most felt from their energy bills, which is set to rise by £693 a year following a rise to the energy price at the start of April. Two years of Covid lockdowns and social restrictions has resulted in pent up demand for leisure activities and entertainment outside the home, but almost a fifth of respondents to our survey fear that these areas of expenditure will soon become unaffordable.

“Keeping tabs on your spending amid the escalating cost of living crisis is important to ensure that you remain financially stable today without compromising on achieving tomorrow’s financial goals.”