Close to half (45%) of UK adults have expressed concern about the financial decision-making of vulnerable relatives as they get older, according to a report by Standard Life.
Almost a quarter (23%) believe relatives have made poor financial decisions in the last two years.
A lack of knowledge or understanding was cited as the key reason (37%) for poor financial decisions, followed by a lack of access to proper advice or guidance (31%).
The report also found that nearly half of respondents (49%) feel 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. Against this backdrop, advisers said they believe as many as 35% of their clients could be classed as vulnerable.
Chris Hudson, retail intermediary managing director at Standard Life, said: “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.”
Hudson said the sheer number of clients advisers believe could be vulnerable is “telling” and urged a collective response from providers, regulators, Government and advisers 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,” Hudson said.
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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