Does money buy happiness?

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Having a fortune doesn’t mean that you’ll be happy – or does it? It’s certainly true that money can afford you exciting opportunities, and that having a savings pot can help alleviate some of the stresses of day-to-day life, but how exactly does money impact our happiness levels?

We carried out research into whether money really can buy you happiness, analysing data from Office for National Statistics (ONS), personal well-being reports, and the World Health Organisation to reveal the cities in the UK where money can buy you happiness.

We then used GDP data to calculate the number of millionaires and billionaires in some of the largest countries around the world and compared this to data from the ONS to reveal which country is the happiest vs the amount of wealth that country has.

Coming in at number one on our list was the city of Oxford in the South East. Oxford has one of the highest happiness and life satisfaction ratings of our entire ranking which, combined with a life expectancy of 88 years, gave the city a happiness index rating of 82. The average salary for people living and working in Oxford, or in this case the cost of happiness, is £35,448, up £102 since the last index in 2020.

In second place is Winchester, also located in South East England. The Hampshire city has an overall happiness index rating of 76, combined with a life expectancy of 88 years and a life satisfaction score of 80.1. The average salary in Winchester is £35,942, meaning happiness costs £494 more in Winchester than Oxford.

Following closely behind Winchester is Lichfield in the West Midlands. While the anxiety rating for Lichfield is the lowest within the top three, and life expectancy is 86 years, the life satisfaction score is lower than both Winchester and Oxford, resulting in a happiness index score of 75.

Using Gross Domestic Product (GDP) data, we were able to gain an economic snapshot of (almost) every country across the world. We analysed this data to estimate the size of the economy and income per capita by dividing the country’s current economic wealth by its population, and then we compared them on Happiness, Anxiety and Life Satisfaction scores.

Coming up top is Iceland with an overall happiness score of 82 thanks to its life satisfaction score of 76 and a Happiness Index rating of 83.3.

With an overall rating of 78, 86.4 for happiness and an average lifespan of 70.30 years, Luxembourg is in second place. Coming in third place is Sweden, which follows closely behind Iceland with an overall score of 71, but a lower rating of 52.1 for anxiety and a life expectancy of 71 years.

Also making the top 10 list based on countries where money could buy you happiness, were Switzerland, Finland, Singapore, Netherlands, Denmark, Germany and Australia. According to our data, the average happiness score of the top 10 happiest countries was 76.8, with an average life expectancy of 70 years! The average salary of the top 10 happiest countries is £37,825 – suggesting that happiness across the world is achieved more easily if people are earning above that £35k mark.

Kevin Mountford, Co-Founder of Raisin UK, said: “While our research suggests money can help ease the stresses of daily life, leading to a longer life expectancy and subsequently allowing you to buy happiness, it’s not always the case in real life. Our research can help you decide which city across the UK and country in the world to live in to maximise your chances of being the happiest you possibly can, but it’s up to you to make your own happiness.”

OK, so you can’t buy happiness. But there’s no doubt that having the safety net of a savings pot can alleviate stress and contribute to us feeling more secure about the future. Compare different types of savings accounts on the Raisin UK marketplace, such as fixed rate bonds, easy access accounts and notice savings accounts and begin your savings journey today.