Building financial resilience in 2022

The new year is the perfect time to reassess how your finances are faring and take advantage of any opportunities that may lie ahead. Household budgets are likely to be stretched in 2022, with rising inflation and tax increases already on the table. It makes sense to quantify your assets and position them appropriately to build financial resilience for your future.

Millions forecast to be worse off

Analysis by the Institute for Fiscal Studies (IFS) shows that living standards are set to stagnate over the next few years. This year specifically, an average middle-income earner will see take-home pay fall by around 1% as soaring household bills and an increased tax burden outpace any anticipated rise in wages. Research1 also highlights the pandemic’s impact on finances, with almost 16 million people feeling more financially vulnerable than before the pandemic.

Plan for your future

This situation is exacerbated by the fact people typically devote relatively little attention to financial matters. For example, one study2 found that more than four in ten adults would either struggle to locate and access their pension, or said they had ‘no idea’ whatsoever about their pension pots.

Building financial resilience, however, lessens the impact of any unforeseen circumstances and ensures you are prepared for life’s key events, such as retirement. It’s therefore vital to plan now for the future you deserve.

Inflation-proof your finances

Inflation can erode savings quickly and is a growing concern for many. As a result, savers have been increasingly switching money from deposit-based accounts into investments – research3 suggests over half of UK adults have already done this.


The spectre of rising inflation certainly means investors need to carefully consider how to inflation-proof their portfolios. As always, maintaining a diversified range of investments is key, with appropriate portfolio construction enabling successful navigation through any periods of uncertainty.

1Royal London, 2021, 2021

3Aegon, 2021

The value of investments and income from them may go down. You may not get back the original amount invested.