Its research found that just 15% of people believe it has improved over the last three years, despite the economic downturn.

The future also does not bode well for 36% of Britons, who predict that their personal standard of living will decline either slightly or greatly by 2013, compared to 24% who believe standards will improve.

A further 36% think standards will remain the same.

Scottish Provident found that on average 54% of people believe that owning their own home is important for a reasonable standard of living, ranked fourth after having savings (66%), having broadband or internet access in the house (62%) and owning a car (59%).

However, owning a home was considerably more important for older generations, with 65% of people over 55 citing it as vital to a reasonable standard of living, second after having savings (74%).

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The research also revealed that 58% do not have any form of protection product in place should the main breadwinner be unable to work.

Susan Barclay, head of marketing at Scottish Provident, said: “The last few years have hit many Britons hard and our figures have underlined how people are generally not showing much optimism ahead of the start of 2013, as the austerity measures proposed by the coalition government begin to take effect.

“Given these concerns, it has never been more critical for individuals to ensure they have built up an adequate financial safety net to try and combat any unexpected decline in their living standards.”