This is the first in a series of research previews from Nest Insight’s Financial Resilience programme. Through this research and innovation initiative, we’ll be exploring financial resilience at individual, industry and economic levels, and trialling real-world solutions that could improve household financial resilience at scale.
Financial resilience is out of reach for millions of people across the UK. A sudden loss of income or an unexpected expense could push them into debt, or worse.
In January 2025, Nest Insight launched a new programme of work with a focus on financial resilience—people’s ability to bounce back and move forward when they experience a financial shock today, and plan for shocks in the future.
Made possible with the support of JPMorganChase, this new research and innovation project aims to identify effective and scalable solutions to support greater financial resilience for people on low and moderate incomes, and trial those solutions in the real world.
Findings from our programme, and the wider research community, have consistently highlighted how low financial resilience impacts people on lower, moderate and volatile incomes. Many of these households:
| Face increased challenges in making their household budgets work. | Experience debt as a significant factor of how they navigate their financial lives. | Are affected by the mental health impacts of always having their money on their mind. |
| abrdn’s Financial Fairness Tracker shows that between 2020 and 2024, an additional 2.9 million households were in ‘serious financial difficulties’ or ‘struggling’ financially’. | Last year a report from the Money and Pensions Service (MaPS) said that over 8 million UK adults—approximately 15% of the population—require debt advice, while an additional 12.6 million (24%) are at risk of needing it. This means nearly 4 in 10 adults are either already in serious financial difficulty or on the brink of it. | The Money and Mental Health Policy Institute reports that ‘people with experience of mental health problems are 3.5 times more likely to be in problem debt, which makes it harder to recover’. And that cycles of struggling to improve their financial security erodes people’s mental health. |
| Struggle to save, even when they want to. | Include children and young people who face additional challenges to finding their longer-term academic and professional footing. | Are at risk of not having the resources they need to keep themselves safe. |
| Our Workplace savings trials research found that 46 out of 100 employees said payroll saving could help them, but only 1 in 100 actually signed up. Our report Easier to Save showed that when workers were supported through opt-out schemes, participation jumped by 50 percentage points. | Children in households with low financial resilience are at risk of lower educational attainment, or not being in education, employment or training. | Having access to £500 can allow someone to flee an abusive domestic situation. However, MaPS data shows that 9 million people in the UK have no savings and 5 million have less than £100. |
The financial resilience of households is not only a matter of concern for individuals. It’s essential for broader wellbeing and economic growth.
| Low financial resilience affects individuals across multiple dimensions of life. It limits their ability to invest in and contribute to their communities and social networks, weakening the fabric of local support systems. In the workplace, it reduces productivity, increases absenteeism, and impacts business profitability. It can also make it harder for people to be in employment at all, or to take up extra work when it’s available. At scale, this compounds into broader economic challenges for the UK. Supporting financial resilience is not only vital for individual wellbeing, but it also strengthens our economy and society as a whole. | “When you’re in a circumstance that you are constantly worrying about money, you’re trying to think of the options of what you can do to maybe raise money or even provide something for maybe someone you’re responsible for. It really takes a toll on the pressure it has on you and, and how you can deal with that.” Tracy, Nest Insight Expert in Action |
People with financial resilience today are also more likely to save for the future in invested assets such as pensions, increasing investment capacity in the broader economy. You can read more about how household improvements in household-level resilience influence macroeconomic outcomes in another of our recent blogs, as well as this recent paper on financial inclusion and growth from Fair4All Finance and WPI Economics, which we were pleased to contribute to.
The root causes of low financial resilience are structural and complex, but there is meaningful progress to be made at the household level.
From low wages and insecure housing to gaps in transport and childcare, macro-level issues can feel especially difficult to resolve, and progress against them involves coordinated change across the entire system. Yet there are rich opportunities to find and scale effective solutions for some households. When financial tools, products and services are designed inclusively, with real people’s lives in mind, they can open up new opportunities to financial resilience.
By designing with rather than for people, we’re more likely to shift the dial and give them more control over their financial resilience
We’re paying attention to the fact that not all solutions work the same way for everyone. So we’re giving special consideration to the issues of gender and ethnic disparities in financial resilience and access to tools that build it.
We have also set up a group to listen and learn from people whose lived experience instructs how we think about the drivers of low financial resilience, and how to approach market and policy solutions. We call this group our ‘Experts in Action’.
There has never been a better time to work together to tackle the challenge of financial resilience in the UK
Although low financial resilience is a huge challenge, we are encouraged by the creativity and commitment to innovation in this space that we see from multiple organisations.
As a sector, we’ve never had more evidence about people’s resilience needs than there is right now. We are at a moment where the digital solutions space is brimming with innovation, and an understanding of the commercial benefit of providing these customers with tools that work for them.
| A growing body of employers are discussing the ways that supporting workers’ financial wellbeing makes good business sense. Longstanding community-based financial institutions, such as credit unions, provide us with decades of evidence about how people’s financial outcomes can improve when they are offered financial products that genuinely meet their needs and are delivered with empathy and understanding. There’s building momentum for a way forward on financial inclusion in the UK, for sustainable solutions to challenges like child poverty, and building an economy that works for everyone. | “If some of these changes were made, people would feel a little bit more positive in regards to their finances… It takes the smallest bit of confidence to actually progress further…Having that extra help, I think the positivity would just help you move on better, and it also would put you in a position that you also feel better in order to continue that way. It wouldn’t bring you back down.” Tracy, Nest Insight Expert in Action |
Working in far-reaching collaboration with research, industry, and policy partners, our Financial resilience programme will drive forward solutions that are rooted in the lived experience and needs of millions of households in the UK. In future updates, we’ll share more context on specific solution areas, like borrowing and savings, and how they can play a role.
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