Financial wellness requires mental space to tackle important decisions
29 April 2019
People are not devoting the time to making important decisions around their finances and need to create the time and mental space to do so, new research has shown.
One in five (19%) consumers say they put off financial admin because it’s too time-consuming, while 17% find it too stressful, according to research by Scottish Widows.
When they do find the time or mental space to tackle financial decisions, many of those surveyed admitted they didn’t devote their undivided attention to the issue. One in 10 (11%) said they managed their money at work, while 44% said they sort their finances while sat on the sofa.
Scottish Widow said the findings revealed a tendency to focus on day-to-day decisions rather than long-term financial plans. More than half (52%) of Brits said they always ensure they make the best possible choice when picking a holiday destination, in stark contrast to just 29% who say this about making changes to their pension arrangements.
Robert Cochran, retirement expert at Scottish Widows, said: “It’s easy to get caught up when dealing with day-to-day decisions in our hectic lives, but this is stopping many of us from spending the right amount of time making important decisions which can impact our financial wellness.
“Getting to grips with your financial situation is a big decision to make about our future, but technology is making it much easier for people to picture their retirement – seeing your future self makes it much easier to make choices now than a bunch of complicated numbers.”
The research showed that nearly half (47%) of respondents have never even thought about making changes to their pension, with almost two in five (38%) not yet coming to a decision on whether they’ll buy life insurance or not.
Professor Mark Fenton-O’Creevy, professor of organisational behaviour at The Open University Business School, said: “Important decisions about our lives can be easier to tackle if we create the mental space to deal with them. Putting lots of time and effort into everyday choices not only reduces our time and mental resources for more important decisions, it can be a way of avoiding difficult choices we should be making.”
Fenton-O’Creevy recommends putting aside time free of distractions to carry out life admin, pointing out that with life becoming more complex and stressful, our mental energy for making important life choices can be reduced.
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