IFAs, firms express concerns over 25.6m ‘financially vulnerable’ Britons
Financial advisers and product providers have revealed that the are concerned about the futures of millions of Britons, following the publication of The Financial Conduct Authority (FCA) Financial Lives Survey 2017.
According to the FCA survey, more than 50% of UK adults (25.6 million) display one or more characteristics that signal their potential vulnerability – they may be at increased risk of harm, or would suffer disproportionately if harm occurred.
For all age groups the proportions showing characteristics of vulnerability are around the national average of 50%, except that for those 75 and over the proportions showing vulnerable characteristics are higher: 69% for the 75s and over, and 77% for the 85s and over.
Financial Lives is the FCA’s largest tracking survey of consumers and their use of financial services, drawing on responses from just under 13,000 UK consumers aged 18 and over. The aim of the survey is to provide the FCA with what it calls “unique insights” into people’s experiences of retail financial products and services.
The survey collected information about the financial products consumers use and their attitudes to managing their money.
It covers their experiences of using financial products and services, as well as their experiences of dealing with the firms that provide them.
Patrick Connolly, pictured left, Certified Financial Planner at UK IFA Chase de Vere, said that the survey made for “depressing reading” and that many people are not engaged with, and have limited understanding of, their personal finances.
“This is yet another wake up call that we are facing a retirement time-bomb with people living for longer and not saving enough for their financial future,” he said.
“For most people, the days when we could rely upon the government or our employers to provide us with a comfortable standard of living in retirement are long gone. We have to face the fact that we are responsible for fending for ourselves in our later years.
“Those people who aren’t saving enough for their retirement face the stark reality of either a lower standard of living in their old age or effectively working until they drop.
On pensions auto enrolment, Connolly said that while it is a positive initiative with far more people are now paying into a pension scheme, he points that most people are paying, at or near, the minimum amounts.
“This is unlikely to be sufficient to build up a pension pot which is big enough to provide them with the type of retirement they want,” he said. “There is also a big risk that auto enrolment could be giving people a false sense of security, as they’re aware they are saving into a pension but unaware of how little it might provide for them.
Andrew Bailey, pictured left, FCA chief executive, said: “The findings give us a wealth of information which will be used to increase our knowledge and understanding of the issues affecting consumers and how to best protect them. The data gathered will be invaluable in helping the FCA prioritise our work.
“We also hope that the research will provide valuable insight for other organisations focusing on consumers and finance.”