By Marcus Leach
Large numbers of Britons face an uncertain future, particularly when it comes to their retirement, according to the fourth annual Financial Planning Survey, commissioned by the Institute of Financial Planning (IFP) in association with NS&I (National Savings and Investments) for UK Financial Planning Week which takes place 21-27 November.
Financial Planning Week is the national campaign organised by the IFP to raise awareness amongst the general public of the importance of financial planning.
The campaign also aims to encourage people to take action to improve their financial “fitness” and help them achieve the life they want. It also helps them to find quality professional Financial Planning help should they require it.
The survey, which was conducted by YouGov for Financial Planning Week and which questioned over 2,000 people across the UK, discovered that retirement plans for many Brits now hang in the balance as they struggle to pay down debt while worrying about their financial future.
· Only 19% - just one in five people - believe that they are saving enough for their future needs
· Almost half (47%) of Brits are not confident that they’ve saved enough to live comfortably when they retire. Women are particularly at risk with the majority (55%) falling into this category.
· 14% have never made any pension contributions, and a further 31% are not currently contributing to a pension plan of any sort, however, they have contributed in the past.
· Two thirds (66%) of women and over half (54%) of men say they worry about money either always or most of the time.
· Three quarters (77%) of respondents believe that they would be happier if they had more money
Looking ahead to what age the panellists think they will be able to afford to retire, one in ten (10%) think they will “never” be able to, including a worrying 12% of over 55s.
Despite concerns over their future standard of living in retirement, many people are not planning to put money into pension plans to try to improve their position, or may not even be aware that they need to. Just 41% say they would consider making additional contributions into pension plans to avoid delaying their retirement due to the planned increases in the state retirement age.
When asked about their day to day budgeting, it appears that many people are feeling the pinch: 29% of men and 22% of women surveyed in 2011 report they are not even setting out a clear budget — the bedrock of any financial plan, compared to 30% of men and 25% of women in 2010. The majority (53%) of respondents report that their household finances have got either a bit or much worse over the last six months compared to just 43% in the same period last year. With UK inflation at a three year high, this pain looks unlikely to subside any time soon.
In 2010, 45% of people reported that they had a financial plan which they drew up and reviewed regularly. In 2011, this figure remained relatively unchanged with 46%, while the proportion of people with plans increased with age (39% of 25-34 year olds compared to 53% of over 55s).
“These findings present a worrying picture for so many people who are facing an uncertain future yet not taking appropriate steps to improve their situation," Nick Cann, CEO of IFP commented.
"There seems to be awareness but no link to action. Financial Planners can help but the challenge is to ensure a greater engagement with the consumer so that they have confidence in the route that they are taking. During Financial Planning Week we’re providing practical tips, tools and information that people can use to improve their finances and get a clearer understanding of the choices that they have."
Join us on