Luther Vandross and Spike Milligan are both right about money.

When it comes to the age-old debate about money and how it relates to happiness I fall somewhere between Luther Vandross and Spike Milligan on the Venn diagram.

As far as Luther is concerned ‘the best things in life are free’ and it’s hard to argue against that. But as Spike Milligan also pointed out ‘money can’t buy you happiness, but it does bring you a more pleasant form of misery.’

I think between those two points is a good vantage point from which to consider the latest findings of our Money Matters Index (MMI). As always, the index interrogates how people in the UK think, feel and act when it comes to their money and the findings always throw up fascinating insights.

The latest index confirms that the cost-of-living crisis has brought challenges to UK households in navigating our new financial landscape. Nothing surprising there. We are more attentive to our money, readjusting to new financial thresholds and still working out where we sit in this new context.

Digging a little deeper though, the data seems to suggest we are increasingly confronting the fact that our buying power has reduced after the inflation spike. That in turn, is changing our perception of our income, level of wealth and therefore our broader financial identity. The vast majority of us are noticeably worse off and so it follows that our views on where we sit on the spectrum of wealth will have shifted too.

It’s for that reason we thought it would be interesting to benchmark the annual income and level of assets that MMI respondents believed could make you happy and wealthy, respectively. The income figure was £87,000 a whopping £48,000 more than the average annual UK income of £39,000 per year. In terms of assets, being a millionaire is still considered wealthy in the UK. Our respondents reported £1.04m in assets as the exact threshold.

The latest index has also conclusively shown that we are more attentive to money matters than we were 12 months ago. There is no doubt that necessity will be driving that to a large degree as prices have oscillated (wildly in some cases).

It’s here we encounter a problem though. Despite that attentiveness most UK households don’t feel equipped to make an actionable plan for the long-term when it comes to money matters. Whilst short-term pressures are clearly a factor here, only four in 10 of the 2,000 UK adults we spoke to feel able to financially plan further ahead than two years.

With so much of wealth needing to be accumulated over a longer time horizon that does present a challenge to us as an industry. Pensions, investments, mortgages, estate planning etc. all require a coherent plan that looks to the future. As the current cost-of-living pressures begin to ease, the focus for our industry has to be that we can harness this valuable attention on money matters to help drive better long-term financial outcomes for households across the UK.

The Money Matters Index is showing us that people say they need our help to do that.

For the full report, click here.