The cost of living crisis is denting consumers’ confidence in their finances, a new report from AKG and Standard Life shows.
According to the findings, a third (33%) of people feel they have made poor financial decisions in the past two years.
People were most likely to feel they had made poor decisions around their savings (13%), followed by debt (10%), investments (8%) and pensions (7%).
More than one in 10 (12%) are unsure who to turn to for support while a similar number (13%) feel alone when thinking about their finances.
The report also revealed rising anxiety levels among consumers, with more than a third (37%) admitting the impact of inflation has made them more cautious. Two fifths (40%) said they have felt stressed trying to make financial decisions over the past two years. Just over a quarter (27%) feel they are coping for now but would struggle if costs rise further.
A large number of consumers also feel there is a lack of support from the financial services industry, with 43% believing the sector does not provide enough resources to support financial decision making when customers are in difficult, stressful or vulnerable situations. Meanwhile, 42% said they would value extra guidance and advice on their finances.
Chris Hudson, retail intermediary managing director at Standard Life, said UK households have faced a barrage of financial challenges over the past couple of years, with the initial shock of high inflation swiftly joined by a rapid succession of interest rate rises.
“Understandably, many consumers are feeling increasingly anxious about their finances and finding the pressure of making the right decision today overwhelming,” he said.
“While these decisions can be daunting, there’s a huge amount of support out there and nobody needs to struggle alone. It’s clear that as providers we need to get better at signposting people to advice and guidance services to ensure they get as much support as possible so they understand that decisions taken today can have long-term consequences on the financial outcomes of tomorrow.”
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 financial services needs to continue to develop and widen the availability and access to useful information, guidance and advice. Whilst we are experiencing challenging times it is undeniably a good opportunity for the financial services industry to prove how helpful and supportive it can be.”
Main image: md-mahdi-8Sa3qfovv2c-unsplash
