How changing your perception of wealth could help you live happier, now and in retirement

Do you consider yourself wealthy? How about the man next door, or the woman over the road?

While we might see a neighbour with a fancy car and assume they’re rich, we don’t know anything about their underlying circumstances. It can be very easy to jump to conclusions about others’ “wealth” and often compare our own financial circumstances unfavourably.

In fact, according to an HSBC report, the UK has a “wealth perception gap”, with individuals in every wealth bracket consistently underestimating their earnings compared to others.

Keep reading to find out more.

High earners may not consider themselves wealthy as they compare themselves to others

In the report, ‘Your Money’s Worth: Defining Wealth in 2025’, findings reveal that the majority of those earning £100,000 a year don’t consider themselves affluent. The threshold for “wealthy” is actually perceived to be an annual salary of £213,000.

For comparison, according to the Office for National Statistics (ONS), this is more than six times the national average salary.

So, why is there such a big discrepancy between what we earn and what we consider to be wealthy? According to the report, the answer could be psychological. Key findings include that:

• It’s very common for us to compare our finances unfavourably to those of others.
• We can confuse big spending with affluence, not digging deeper into the fact these “wealthy” people may have got into debt to fund purchases.
• People often start valuing non-material possessions when they realise material things didn’t buy them happiness.

Perceptions of wealth can become distorted over time, with higher earners often spending more on clothes, travel, homeware, and organic food than their average-earner counterparts. As these spending habits become routine, though, they are normalised. The expenditure might continue, but it’s no longer linked to a perception of affluence.

Younger generations increasingly see lifestyle and wellbeing as a symbol of wealth

The way we measure wealth today is shifting. Traditionally associated directly with income, there has been a significant move towards seeing lifestyle and wellbeing as better indicators.

This is particularly the case for younger demographics. Almost half (49%) of Gen Z view wealth in non-material terms, and a third of 18–24-year-old high earners believe that having a good work-life balance is a signifier of wealth.

Younger generations are also much more comfortable openly discussing their finances. Half of 18–24-year-olds said they like discussing money, compared with just 3% of over-55s.

Taking a leaf out of their books could help you find value outside of wealth creation, learn to openly discuss wealth and what it means to you, and shift your perceptions of what it is to be “wealthy”.

With this in mind, when do you stop wealth building and start looking at how to use your money, now and throughout retirement?

Shifting your perception from constantly amassing wealth to working out how to use it wisely can be more easily achieved by working with a financial planner.

3 ways a financial planner can help you change your perception of wealth to live a happier life

1. Introducing you to the concept of “enough”

“Enough” means something different to everyone. Realistically, you want to be able to pay your bills while funding your chosen lifestyle throughout your retirement.  A financial planner can help you devise a plan to support this and to manage your expectations.

Constantly chasing after wealth can start to become wearing, especially as you near retirement.

It’s about finding the balance between having “enough” without compromising on what you want out of life.

2. Helping you understand your position right now and looking at your aspirations for retirement

Where are you now? How do you live, and is there anything stopping you from doing the things you want to do? And when you retire, what are your plans? Travel, looking after grandchildren, moving abroad?

There’s not a one-size-fits-all answer, which means there’s not a one-size-fits-all solution. You could have a small pension pot and be perfectly happy staying at home and enjoying time with family.

Or, you might have an overflowing pension and still feel unfulfilled because you’re not spending enough time at home, or spending money in the “wrong” places. Once you’ve uncovered your own aspirations, you can plan accordingly.

3. Teaching you to focus on your financial goals without comparing yourself to others

As you can see from the report, wealth perception is subjective. All too often, you might find yourself looking to others’ material possessions as an indicator, comparing yourself unfavourably if you have a smaller house or older car, for example.

A financial planner will help you keep your focus on your own circumstances and goals, gently discouraging you from looking around you and instead guiding you along your own path.

Get in touch

Resolutely focusing on your own finances without getting sidetracked by what others have – or what you perceive they have – means shifting your mindset around what is “enough”.

We can help you work out what your goals are, now and in the long term, to help you understand how to achieve these aspirations.

Please email hello@bluewealth.co.uk or call us on 0117 332 0230.

Please note

The content of this newsletter is offered only for general informational and educational purposes. It is not offered as, and does not constitute, financial advice.

Blue Wealth Ltd is not responsible for the accuracy of the information contained within linked sites.

Blue Wealth Ltd is an appointed representative of Best Practice IFA Group Ltd, which is authorised and regulated by the Financial Conduct Authority.

Approved by Best Practice IFA Group: 28/4/25