British households suffer

British households have suffered the sharpest fall in wealth since records began, according to new research, as higher living costs and global uncertainty continue to weigh on family finances.

A survey of 6,000 people carried out by wealth manager St James's Place found average household wealth, as estimated by respondents, dropped from £126,482 in 2025 to £104,329 this year, a decline of 17.5%.

The company said the fall was recorded across every income bracket and represents the biggest drop since the survey was launched four years ago.

Respondents pointed to rising food prices, a lack of pay increases, higher rents and larger tax bills as some of the biggest pressures on their finances.

The findings come against a backdrop of heightened international uncertainty and continued pressure on the cost of living.

According to the report, households are facing a combination of higher everyday expenses and growing concerns about the wider economy, leaving many people feeling less financially secure than they did a year ago.

The survey was conducted between March and April, before the latest political turmoil in Westminster, which has also unsettled financial markets.

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The figures come as inflationary pressures remain in focus and the Bank of England faces calls to raise interest rates in response to rising prices.

The report by the Daily Mail states the Bank has warned that a prolonged conflict involving Iran could push inflation above six per cent, potentially requiring interest rates to increase several more times.

Mortgage rates offered by lenders have already risen as financial markets anticipate a higher path for borrowing costs.

The report also notes that the conflict in the Middle East has added to existing economic pressures, with UK inflation already among the highest in the G7 and economic growth remaining subdued before the latest escalation.

Alexandra Loydon, group advice director at St James's Place, said: "Many households are feeling worse off, with living costs and heightened global uncertainty weighing on confidence and, understandably, affecting how people feel about their finances and the future.

"People are naturally feeling a bit more cautious and unsettled and insecure. There's been a sustained period of sustained financial pressures for people.

"Every income level is showing a drop and showing that people are feeling less resilient."

She added that the research suggested people who put a clear financial plan in place were generally better positioned to protect or grow their wealth regardless of their earnings or personal circumstances.

The survey measured people's perception of their wealth by looking at savings, investments and physical possessions, while excluding property and pension assets.

According to the findings, average perceived household wealth is now below the £111,797 recorded when the study first began in 2022.

The research also found that twice as many respondents said their financial position had deteriorated over the past year compared with those who believed it had improved.