Financial happiness hit an almost two-year high in August, according to Dynamic Planner’s Financial Happiness Index.
The monthly index, which is based on a 12-question survey and draws on responses from around 4,000 people per month, showed financial happiness rose 0.06% month-on-month to 3.92 in August, marking its highest level in 21 months.
The index is measured across three pillars: financial resilience, emotional resilience and financial knowledge and confidence.
Dynamic Planner said August’s uplift was driven largely by gains in emotional resilience and financial knowledge and confidence and reflects steadier sentiment sustained across the whole month, rather than the result of a single event.
It follows a drop in the last part of July when three events converged within 24 to 48 hours; sporting disappointment, political uncertainty and fresh concern about borrowing costs and prices.
Dr Louis Williams, head of psychology and behavioural insights at Dynamic Planner, said: “August brought no political shock; the Bank of England held rates at 3.75% on the 30th of July and stayed on hold through August; and July’s inflation figure, released in August, rose to 2.9% from June’s 2.6%, but this had been widely anticipated and may already have been reflected in the Index drop seen in late July. Mortgage rates also stabilised somewhat.
“What’s driven the high is harder to pin down precisely. Is this due to the “Burnham bounce,” a fresh government settling in without incident? Or a combination of factors: falling oil prices, a well-received housing and infrastructure investment announcement, and the country moving on from the disappointment of the World Cup? The evidence points to an accumulation of small, mutually reinforcing positives rather than any single turning point.”
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