By Roger Baird on 15th April 2019
Almost half of adults with savings accounts have no idea what interest rate they are getting, adds the YouGov survey.
More than seven in ten Britons have no investments, demonstrating the country’s widespread financial ‘advice gap’, according to a report.
New research shows that 71 per cent of adults have not bought investment products, such as shares or bonds, adding that a further 47 per cent of people with savings accounts have no idea what interest rate they are getting, said a YouGov survey.
This lack of financial education, the study said, comes despite the fact that 79 per cent of Britons say they make “a conscious effort to budget in every typical month”.
The report cited a range of reasons why people do not invest in their futures, such as not understanding investments, thinking “they're not rich enough”, and a lack of professional help.
Almost half of those asked in the survey (47 per cent) added that a slowing economy due to Brexit would have “a negative impact on the value of their savings”.
The report also highlighted that 36 per cent of adults have been affected by branch closures, affecting their access to professional financial advice.
And earlier report by watchdog the Financial Conduct Authority found that only six per cent of 18-34-year-olds received financial advice in 2017. Another survey in the same year by investment house Schroders found that half of all individual financial advisers turned away clients with less than £50,000 to invest.
The YouGov study said these features contribute to the UK's "‘advice gap’, meaning most customers are not receiving enough help to plan for their financial futures".
“Without much help, complex financial product structures and a lack of transparency around pricing still leave a large part of the population without much of a sense on how to plan for the longer term,” added the YouGov report.
The survey was commissioned by new current account and investment app Dozens and equity investment platform Seedrs.
Dozens founder and chief executive , Aritra Chakravarty, said: “Many fintechs shy away from offering simpler investment journeys to those without prior investment experience because of the regulatory hurdles, leaving customers with little help to plan for their financial futures."
The former banker, who spent 13 years at HSBC, added: “Meanwhile the banks that hold the majority of retail consumer money aren’t structured in a way which incentivises them to get customers to invest some of their savings into higher return products which are right for their risk appetite – because most banks earn the bulk of their revenues on mortgages, credit cards and personal loans, any funds moved away from current and saving accounts means a smaller lending book and so less revenue.”
The survey conducted online interviews with a representative sample of 2,077 adults between February 15 to 18.