1 in 10 UK adults fear their more vulnerable relatives have lost money through poor financial decisions

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• 45% are concerned about the financial decision-making of more vulnerable relatives
• Almost a quarter (23%) worry vulnerable relatives had made poor financial decisions in the past two years
• On average, IFAs believe 35% of their clients could be classed as vulnerable
• Standard Life highlights the importance of supporting vulnerable clients

Close to half (45%) of UK adults are concerned about the financial decision-making of their more vulnerable relatives as they get older, with 1 in 10 (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. ¹

Overall, almost a quarter (23%) believe relatives had made poor financial decisions in the last two years.

Reasons for poor financial decisions
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.

Fears for the future
Almost half of the 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:

• illness (30%)
• deteriorating physical health (28%)
• bereavement (19%)

Observations among financial advisers is similar with on average, advisers believing as many as 35% of their clients could be classed as vulnerable ².

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, added:
“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.”

 

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Notes to Editors

¹ – Opinium Research surveyed 2000 UK adults online between 14-17 February 2023 on behalf of AKG. Results were weighted to be nationally representative.
^{2 –} Pureprofile surveyed 100 advisers in February 2023 on behalf of AKG

Findings featured in AKG’s vulnerable customers and financial wellbeing themed research paper (issued on 24 May 2023).

About Standard Life

Standard Life is a brand that has been trusted to look after peoples’ life savings for nearly 200 years
Standard Life is part of Phoenix Group, the largest long-term savings and retirement business in the UK. We’re proud to be building on nearly 200 years of Standard Life heritage together
Our products include a variety of Pensions, Bonds and Retirement options to suit people’s needs, helping our customers to invest and save for their future. We’re proud to offer a leading range of sustainable and responsible investment options.
The value of investments can go down as well as up and may be worth less than originally invested.We support our customers on their journey to and through retirement with comprehensive, easy-to-understand guidance so they can invest in the right way for their needs and plan a future they feel confident about.

About AKG
AKG is an independent organisation, which has specialised in the provision of assessment, ratings, information and market assistance to the financial services industry for over 30 years.