- Defining financial wellness
- Understanding Fidelity’s Financial Wellness Score
- Financial wellness in the UK
- Helping UK employees with financial wellness
- Read the global report
To better understand financial wellness of people around the world, our comprehensive survey posed financial and behavioural questions to working households in the United Kingdom, Germany, Japan, China, Hong Kong and Canada.
Defining Financial Wellness
We believe financial wellness is holistic and multi-layered and our survey assessed objective and subjective inputs across four key domains: Budgeting, Debt, Savings and Protection.
Understanding Fidelity’s Financial Wellness Score
The Fidelity Financial Wellness Score uses a consistent analytical framework across the regions while using modelling assumptions that are appropriate for each region. The Score combines objective criteria – such as their level of savings and how they manage expenses – with subjective criteria, such as how they feel about their finances.
The combination of objective and subjective assessments across multiple domains is critical because an individual’s financial situation and sentiment may differ. Doing well financially—e.g., maintaining a budget, saving enough for retirement, investing appropriately—is no guarantee of feeling good about one’s finances, nor is feeling good a guarantee of financial success.
Understanding the subjective and objective side of financial wellness is key to communicating effectively with employees about their finances. Employees who are at-risk but unaware may need a “wake-up call,” while others who are financially secure but worried may benefit from confidence-boosting assurance that they’re on the right track.
How is the score calculated?
Each domain contributes a maximum of 25 points to the overall maximum Financial Wellness Score of 100. This scoring approach affords great flexibility in breaking down the score in ways that provide deep insights into personal financial well-being.
The sum of all four domains yields a total score that can range from 0 to 100, where 0 represents extreme financial distress and 100 indicates the maximum level of financial wellness.
The total score is categorised into one of four discrete levels of financial wellness:
- Excellent (80–100)
- Good (60–79)
- Fair (40–59)
- Needs Attention (0–39)
Financial wellness in the UK
Fidelity’s analysis of financial wellness data for the United Kingdom resulted in a calculated median Financial Wellness Score of 63.
When looking at the total median score distribution most respondents were in the “Good” (55%) or “Fair” (35%) categories. Only 5% were in the “Excellent” category and 5% were in the “Needs Attention” category. Overall, this places the median score of 63 for the UK at the lower end of the “Good” category range and indicates that there are opportunities for improvement.
UK Scores varied slightly by age. The older generation appears to be in the strongest position with a score of 67, followed by the younger generation who had a score of 64 and middle-aged workers in the UK who returned the lowest score of 61.
Objective vs subjective financial wellness in the United Kingdom
In the UK, we found that 24% of people surveyed have an overall mismatch between their own subjective assessment of financial wellness and Fidelity’s objective assessment through the score. That is, some people are more confident than their score suggests they should be, and some are less.
Source: Fidelity Global Financial Wellness Survey, 2020. The percentage represents the % of survey respondents in each objective/subjective category.
A detailed analysis of score results can be found in our Global Financial Wellness Report
Helping UK employees with financial wellness
Our Financial Wellness solution helps employees focus on their day-to-day financial status and prioritise the steps needed to improve their own situation. It highlights the good habits they should continue with alongside the areas they can improve on to enhance their overall financial wellbeing.
This includes a personal Financial Wellness Score that can help people decide if they are financially well or not. It is based on the four key domains of Financial Wellness: Budget, Debt, Savings and Protection
Our tool allows members to download and save their results and suggested actions as a printable PDF so they can track their progress.