New poll highlights financial health concerns

14 August 2007

The Resolution Foundation is an independent research and policy organisation, which is currently
focusing on how people on low incomes can access and use the financial services system

NEW FINANCIAL ADVICE SERVICE NEEDED AS PARENTS FEAR FOR THEIR
CHILDREN’S FINANCIAL FUTURES

A new poll commissioned by the Resolution Foundation from YouGov has found that nearly 70
per cent of parents worry about how their children will deal with the financial decisions they will
face during their lifetimes. (1) Revealing significant concern about the nation’s financial health,
the poll also found that:

• · Nearly 60 per cent of people believe that the average UK person is in a poor state of financial health
• · Almost 80 per cent of people worry about their finances at least ‘sometimes’, with 1 in 10 worrying ‘all the time’
• · Over 60 per cent believe that people find managing their personal finances more challenging than they did 10 years ago

These findings come as a Treasury-appointed review, led by Otto Thoresen, Chief Executive of AEGON UK, is considering how to make generic financial advice available on a national basis. (2) The poll showed that nearly three-quarters of people support this idea, providing a strong endorsement for the Review’s work.

The poll found that people would prefer an independent organisation to run the new advice service, rather than the Government or financial services companies. On this basis, it also indicated that the most popular way of paying for it would be through a public-private funding agreement between the Government and the financial services industry. In a new report also published today, the Foundation is therefore underlining the opportunity for the Government to earmark funding in the forthcoming Comprehensive Spending Review to help deliver the new
advice service, following the publication of the Thoresen Review’s recommendations in the new year. (3)

The Resolution Foundation has previously published research showing that greater access to financial advice could leave young people on low to moderate incomes £60,000 better off by the time they reach 60, deliver welfare savings of £100 million within 10 years and provide long term benefits to the financial services industry. (4)

Clive Cowdery, Chairman of the Resolution Foundation, said: “This poll demonstrates how many people worry about their finances and their children’s financial futures. It shows that people support plans to increase access to financial advice, strongly endorsing the work of the Thoresen Review.”

For further information or to interview Clive Cowdery, please contact: Alex Child-Villiers/Tom Allison on 020 7002 1080

Notes to editors
(1) The sample size for the survey was 2,010 adults. Fieldwork was undertaken from 25-27 July 2007. The survey was carried out online. The results have been weighted and are
representative of all GB adults (aged 18+). Among the key findings:
· 68 per cent of parents worry about how their children will deal with the financial
decisions they will face during their lifetime
· 42 per cent of people admit to worrying about their personal finances ‘sometimes’, with
a further 27 per cent worrying ‘often’ and 10 per cent worrying ‘all the time’
· 59 per cent of people believe that the average UK person is in a ‘fairly bad’ or ‘very bad’
state of financial health
· 62 per cent of people think that people find managing personal finances more
challenging than they did 10 years ago
· People on low to moderate incomes are nearly 40 per cent less likely to use an
independent financial adviser than those on higher incomes
· 72 per cent of people support proposals for a new generic financial advice service, with
only 7 per cent opposing this
· 53 per cent of people said they would be likely to use such a service at least once a
year, with 35 per cent likely to use it at least every few months and only 11 per cent
saying they would never use it
· 49 per cent of people who expressed a view said they would prefer an independent
organisation to run the service, rather than the Government or financial services
companies
· On the basis that the service is run by an independent organisation, 49 per cent of
people who expressed a view said they supported a public-private funding arrangement
between the Government and the financial services industry, in preference to it being
paid for solely by the Government or the industry
(2) The Thoresen Review of Generic Financial Advice was announced by the Economic
Secretary to the Treasury on 15 January 2007 and will report to ministers around the turn of the
year. Generic financial advice is advice and guidance which helps people understand their
financial needs and make appropriate financial decisions in light of their individual
circumstances, but does not recommend specific financial products or providers.
(3) The report Tackling the financial capability deficit is available to download from the
Foundation’s website www.resolutionfoundation.org
(4) See Closing the advice gap: providing financial advice to people on low incomes; A national
dividend: The economic impact of financial advice; and The advice gain: The impact of generic
financial advice on the financial services industry all of which can be downloaded from the
Foundation’s website.