Money worries hitting more people
This is according to a survey for this week’s Financial Planning Week, which revealed that six out of 10 people (59%) in the UK are worried about their finances and a staggering nine out of 10 (91%) say they’d be more likely to save if financial products were more flexible and made easier to understand.
The Financial Planning Survey 2010, which was commissioned by the Institute of Financial Planning (IFP) in association with NS&I (National Savings and Investments), questioned a total of 2084 men and women.
The survey found that 43% of people worry about money “more often than not” and 16% worry about it “all the time”. Only 3% of respondents in this year’s survey say they “rarely worry about money” – a dramatic drop from 2009, when 12% of respondents said they rarely worried about money.
The survey also questioned respondents about the usefulness of different sources of financial advice. Independent financial advisers had the second highest score, 7.4 out of 10, while bank representatives (the most-used source of advice – 48% of respondents) had the second lowest score, 6.2.
And while 34% of respondents agreed that a financial adviser would “research the entire market and recommend the most appropriate product” and 30% felt that they would “help to unravel the complexity of the financial world”, just over a quarter (26%) could think of no benefit at all to using one.
There are signs that more people are taking professional advice on a regular basis however. In 2009, only 7% of respondents regularly spoke to a financial adviser, while that figure has now gone up by 4%, to 11%.
Compared to previous years’ findings in 2008 and 2009, fewer people this year have taken the time to identify their financial priorities and put plans in place to achieve them. Just 14% have financial goals they are working towards, in contrast with the 26% of respondents who answered positively in 2008.
And over a quarter (27%) of all respondents say they never set themselves a clear budget to follow. Younger people are particularly unlikely to plan for their future: 88% of 25-to-34-year-olds say they do not have a financial plan which they review regularly with a financial adviser or planner. Meanwhile a third (33%) of people overall say they hope to improve their financial situation by winning the lottery.
Perhaps then it is not surprising that an overwhelming three quarters (75%) of respondents in this year’s survey believe they would be happier if they had more money.
Nick Cann, CEO of IFP said: “This survey has indicated yet again that consumers are worried about their financial position, yet they are not taking appropriate financial planning steps to improve it. They are confused by the range of products available and lack confidence in them too. The Government has indicated (with changes to the state pension age, and the reduction in tax relief for some on pension savings) that individuals will need to take more personal responsibility when planning their finances if they are to accumulate the funds necessary to provide the standard of living that they aspire to in retirement. Clearly, the need for sound financial planning has never been greater.”
John Prout, sales director of NS&I commented: “It’s important that consumers make an honest appraisal of their financial situation on a regular basis, through assessing three key things; the value of their debt and/or assets, the interest rate they are paying or earning on these and whether they could manage financially if their income was to reduce or their outgoings to increase. By reviewing and making plans to manage the unexpected it should to be much more manageable should they ever experience a squeeze on their finances. For some people seeking independent financial advice may be a key part of this process.”