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UK Consumers Still Failing to Save for Retirement

Nick Cann CFP United KingdomBy Nick Cann, CFP

The Institute of Financial Planning launched its fourth annual Financial Planning Week in November, and with it, our fourth annual consumer survey carried out by YouGov in association with National Savings and Investments (NS&I). Once again, this year’s survey results showed the uncertain financial situation that we are in as UK Plc. The survey revealed that people are understandably worried about their finances in these tricky times, yet don’t know what to do to improve them. There appears to be very little confidence in the broader financial services sector.

This is not helped by reports like that delivered by Which? last week. That research highlighted that banks had let their customers down and taken huge commissions in the process, but unfortunately this is not news.

Yet, it doesn’t have to be like this. The same Which Report suggested that the mystery shopping exercise undertaken with Independent Financial Advisers (IFAs) had uncovered a much more positive experience. As individuals, we need our hard earned cash to help us meet our longer term needs and goals – it is, after all, just a means to an end. This is where financial planning is so important, regardless of whether individuals create plans themselves or enlist the help of a professional financial planner.

Products vs. Planning

Part of the problem, as I see it, is that so many organisations are looking to sell a “product,” whether it’s the latest investment trend, an individual savings account or a pension.   Financial planning takes a different approach – it puts an individual’s needs at the heart of the process and considers what one has to do to achieve short, medium and long term goals in life first. There is usually a need to prioritise these goals and then build a plan of action to work out how the individual can afford to do these things.

Financial Planning Week Builds Awareness

Professional financial planners will aim to add real value for clients and that value will be in the plan they create with them, and not just in recommending the products that one might or might not want, or the returns on investment that one might or might not expect. A “Financial Planning Week” lasts seven days; however a financial plan will help an individual organise the rest of his or her life in a way he or she has probably not appreciated before. With each passing year, the IFP reaches more and more UK consumers with the financial planning message during Financial Planning Week, with increasing success. How are you reaching out to consumers in your country or territory?

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