By Francesca James
With the UK having just emerged from a double dip recession, just over 1 in 4 Brits (26%) surveyed for Financial Planning Week say that a prolonged recession is their biggest fear when it comes to the current state of the economy and how it impacts on their finances.
The survey, which was conducted by YouGov for Financial Planning Week in association with Liontrust questioned over 1,000 people across Britain. The Institute of Financial Planning (IFP) is running a series of daily polls with consumers throughout Financial Planning Week to find out what people are thinking and doing when it comes to their money - and how they are coping with their personal finances during these uncertain times.
Worries about a prolonged recession are more dominant in those aged 45 and over, with just under 1 in 3 (30%) of 45 - 54 year olds and just over 1 in 3 (35%) of 55 and overs citing it as their main concern. Other worries about the state of the economy are rising unemployment (14%) which is more keenly felt by women with 17% citing it as their biggest worry compared to just 11% of men while 36% of 18 to 24s listed it as their biggest concern. Increases in taxation(14%) is also a worry as is rising inflation (12%). Interestingly, when it comes to those who are aged 55 and over, 21% fear rising inflation the most which can make such a dent in the value of savings compared to just 9% of those aged between 25 and 44. Future increases in interest rates do not appear to be worrying people as much at the moment, with just 7% indicating this as their biggest economic fear.
Nick Cann, CEO of IFP comments: "Clearly the weak state of the economy continues to give people concerns about their financial situation. This is just the reason why planning is so important, as inactivity or ignoring the situation in the hope that things will turn out ok is just not a solution. All of us can make changes, having initially taken the time to work out our budget, by taking steps to improve a shortfall or save or invest a surplus. Even though getting professional financial advice will help provide context and direction around a person's finances, there are also lots of simple steps that an individual can do themselves, to take more control over their money and getting better peace of mind as a result."
John Ions, Chief Executive of Liontrust, says: "The number of concerns raised in today's survey perfectly illustrates the level of economic uncertainty we all face. This emphasises the role that financial advisers can play in helping people to manage their finances and navigate their way through this minefield. The worries of the over 55s about rising inflation show the importance of finding sources of income other than bank accounts, which include UK and international equities."
Alan Dick, Vice President of IFP and a Financial Planner at Forty Two Wealth Management comments: "It is disappointing to see that so many people are worried about the future. This highlights the need for a clear financial plan that includes contingency measures for events such as unemployment while also addressing the risks of inflation and increased taxation. None of us can see into the future but we can protect ourselves from some of the biggest risks with a little careful planning. The main thing is to identify the risks properly and acknowledge them rather than worry unnecessarily. Just talking through the extent of any risks and the possible implications may be enough to provide some peace of mind. The worst thing anyone can do is worry in silence."