The cost of living crisis across the past couple of years has affected thousands of people across the UK, with financial insecurity and wage stagnation commonly amongst the top concerns for many. With recent data from the ONS revealing a sharp decline in life satisfaction scores and heightened anxiety levels across the UK, we’ve looked into the correlation between this drop in person well-being scores and income.
Moneyzine.co.uk found a direct correlation between regions with the slowest growth in wages year-on-year and those reporting the great decline in life satisfaction. Interestingly, the same increase in life satisfaction could not be found in regions where wages have increased at a higher rate.
Key Findings:
East Midlands residents are experiencing the most stagnant wages in the UK, as well as amongst the biggest declines in life satisfaction scores.
The North East and Yorkshire & the Humber also demonstrate similarly small increases in wages in the past year and significant declines in life satisfaction scores.
Scotland is the only place in the UK with an increase in life satisfaction in 2023, and has had the fifth-highest increase in wages year-on-year.
“We know that financial insecurity and stagnant wages can have a huge impact on an individual’s well-being, especially in a time in which inflation is driving costs up across the board.
The data showed that across the UK, life satisfaction is dropping - but we think it’s particularly important to demonstrate how wage growth, and where you are in the UK, can be a direct factor in influencing those scores.”Jonathan Merry, Personal Finance ExpertJonathan Merry
All UK Regions Drop In Life Satisfaction Scores
The ONS release revealed that across the UK, ratings of personal well-being have declined sharply in the last year. Most regions saw a significant decrease in life satisfaction, while many also saw an increase in anxiety levels.
Across all UK regions, there was a drop in average life satisfaction scores year-on-year, with the North West, Yorkshire and the Humber, the East Midlands, and the East of England all revealing statistically significant declines:
North West (0.11 point decrease)
Yorkshire and The Humber (0.15 point decrease)
East Midlands (0.15 point decrease)
East of England (0.15 point decrease)
Meanwhile, the East of England, Yorkshire and the Humber, and the North West also experienced a small, but notable, increase in anxiety levels year-on-year.
Distinct Correlation Between Regions with Reduced Personal Well-being and Stagnant Wages
Our experts analysed the average life satisfaction score, average anxiety score, and average annual wage across all regions over the last 10 years to find out where - if any - in the UK is most affected.
We found a distinct correlation between the regions with the smallest increase in mean annual wages and the regions with a drop in life satisfaction scores and increased anxiety.
East Midlands Has Lowest Wage Growth & Highest Drop in Life Satisfaction
It’s reasonable to wonder if workers in the East Midlands aren’t experiencing a notable drop in life satisfaction this year due to their wages stagnating - especially in comparison to the rest of the UK.
Between 2022 and 2023, wages in the East Midlands increased by just 4.5%, from an annual mean of £29,360 to £30,686. Meanwhile, life satisfaction scores dropped by 0.15 points (2%) in the same time frame - one of the biggest drops across all UK regions.
It’s also worth noting that the East Midlands has also experienced the smallest growth in wages across a 10-year period, increasing by 26.7% from £24,228 in 2013.
Interestingly, the East Midlands is actually the only UK region that did not experience any change in mean anxiety scores between 2022 and 2023, despite the two factors mentioned above.
North East and Yorkshire & the Humber Also Decline in Life Satisfaction with Stagnant Wages
Yorkshire and the Humber and the North East are the two next UK regions in which a strong correlation can be suggested between low wage-growth and declining life satisfaction.
In the North East, wages increased just 4.6%, from an annual mean of £28,396 in 2022 to £29,706 in 2023. The North East also experienced a 0.11 point increase in mean anxiety scores and a 0.06 drop in life satisfaction.
Life satisfaction scores also saw a significant decline in the last year in Yorkshire and the Humber, with a 0.15 point decrease (and the lowest life satisfaction score for this region in 10-years). The region also experienced the third-smallest growth in wages between 2022 and 2023, from an annual mean of £29,864 to £31,283.
Scotland Experiences Higher Increase in Wages & Increased Life Satisfaction
Across the UK, the only location to see an increase in life satisfaction scores across the UK was Scotland, with a 0.04 point increase. It is important to note, however, that Scotland did also report a jump in anxiety levels - by 0.12 points.
However, the increased life satisfaction could be seen to be as a result of a larger jump in mean annual wages. Wages increased by 6.4% between 2022 and 2023, the fifth highest region to see wage growth.
No Clear Correlation Between High Wage Growth and Higher Life Satisfaction Scores
While there may be clear indications that the regions with the most stagnant wages in the last few years are also those experiencing declines in life satisfaction, the opposite can not necessarily be said of the regions that have experienced a more significant growth in mean annual wages.
For example, the West Midlands and Northern Ireland stand out as the two places in the UK with the biggest annual growth in mean wages (with a 7.1% jump respectively).
However, both regions still saw a decline in mean life satisfaction scores. In the West Midlands, life satisfaction scores dropped by 0.08 points, whilst they dropped by 0.06 points in Northern Ireland. Likewise, despite a bigger jump in annual wages compared to other regions, both regions also reported higher average anxiety scores this year compared to last.
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