One in eight (12%) people with a salary over £100,000, but with no parental wealth to fall back on, feel “trapped” by their current financial commitments, a survey has found.
More than two-fifths (44%) do not feel that they are able to comfortably meet their financial commitments each month, according to the research commissioned by wealth manager Killik & Co.
Despite their high salaries, nearly a fifth (18%) of high earners in this group admit that their financial commitments are causing them stress and anxiety.
Over a quarter (28%) said that the cost of supporting loved ones is reducing their financial savings while 26% said their own personal financial commitments are impacting their financial cushion.
The most common monthly financial commitment, aside from household expenses and utility bills, was insurance (66%), including health, home and car cover.
Nearly half (47%) of those surveyed have commuting costs, and 45% have private healthcare or other medical expenses. Over a third (36%) have credit card debt to pay.
This group is also largely focused on the short term, the research indicated, with the majority (56%) thinking only a year ahead when planning finances and only 3% planning more than five years in advance.
Will Stevens, head of wealth planning, Killik & Co said: “A high tax burden, loss of free childcare, family dependants and mortgage costs all stack up and make it difficult for even those on the highest salaries to build up financial resilience.
“If they are not due an inheritance, it’s clear even those on six figures and above are struggling to build up savings to ensure longer-term financial stability for their family.
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“Provided money is managed carefully, this doesn’t need to be the case. Upweighting pension contributions, managing salary increases and childcare support, and seeking financial advice to ensure your estate is well structured from a tax perspective, can all help high earners avoid the common traps which block them from accumulating wealth.”
More than 2,000 people across the UK who are earning £100,000 or more and do not stand to inherit money from parents and whose parents cannot support them financially were surveyed by Censuswide for the research carried out in April and May.
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