Close to half (45%) of adults are concerned about the financial decision-making of their more vulnerable relatives as they get older, with one in ten (10%) saying their relatives have made poor financial decisions in the past two years resulting in some form of financial loss, according to data from a recent report by AKG, sponsored by Standard Life.
Overall, almost a quarter (23%) believe relatives had made poor financial decisions in the last two years.
Among those with relatives who have made poor financial decisions, 37% attributed this to a lack of knowledge or understanding, while 31% said their relative had lacked access to proper advice or guidance.
Almost half of participants (49%) are apprehensive about their own financial decision-making capabilities as they move through life, with 14% specifically concerned about their financial decision-making as they approach retirement. Additional causes for concern about financial decision-making in older age include:
Observations among financial advisers is similar with on average, advisers believing as many as 35% of their clients could be classed as vulnerable.
Commenting on the findings, Chris Hudson, Retail Intermediary Managing Director at Standard Life, part of Phoenix Group said “People are naturally always concerned for the wellbeing of their vulnerable relatives, particularly when it comes to financial decision-making which can be confusing and easy to get wrong at any stage of your life. The ongoing cost of living crisis has amplified the UK’s problem with low financial awareness and understanding, with people often more likely to make risky decisions when they are struggling. For example, there can be a strong temptation to use long-term savings to cover day-to-day costs. As a result many people, particularly the more vulnerable, are at risk of making poor financial decisions and could become easy targets for scammers. We urge people not to struggle alone – speaking to a financial adviser or accessing financial guidance and education can be invaluable throughout life.”
“The fact that financial advisers consider over a third of those who do seek advice to be vulnerable is telling – it’s scary to think how many people who are not advised could fall into this category. A collective response from providers, regulators, Government, and advisers is needed to help people access advice and empower and educate clients. Crucially, the industry as a whole needs to invest in vulnerability programmes and make sure it’s providing the flexibility needed to treat vulnerable people well.”
Matt Ward, Communications Director at AKG, said “We know from this body of research and many others that a wide range of consumers need more help when it comes to understanding and making financial decisions. Access to affordable financial advice remains challenging for many consumers and so outside of the mainstream advice market the financial services industry needs to continue to widen the availability and access to useful information, guidance and advice.”