UK consumers are worried about the economic climate and its possible impact on their finances, according to a survey carried out as part of Financial Planning Week
As part of its sixth annual Financial Planning Week, the Institute for Financial Planning (IFP) is conducting a series of daily consumer polls. Today’s poll, carried out by YouGov, indicates that, despite recent hints from the Bank of England that a recovery is underway, many UK households are still finding it tough.
Eighty-two percent of people said that they worry about money some, most or all of the time, compared to just 60% in 2011. In addition, almost two thirds of respondents (60%) said that they are struggling to keep up with bills and credit commitments.
Respondents were also asked about their fears regarding the economy and its impact on their finances, with the report finding differences by age.
More than half (55%) cited rising living costs as a fear, including 62% of those aged 55 and over.
Those aged 25-54 were the most afraid of a potential rise in interest rates. This is also the group most likely to be affected by any increase in mortgage rates that occurs if interest rates rise.
People aged 55 and over were most likely to be worried about low rates affecting returns on their savings; 47% said this was a worry compared to just 15% of those aged 35-44.
Steve Gazzard, CEO of the IFP, said:
“This two tier impact shows borrowers have benefitted from lower interest rates on mortgages and debt, whilst savers have been under real pressure with returns below inflation which have eroded the value of their savings. It’s clear that people should consider spreading their investments in order to reduce their exposure to risk, as well as helping preserve the value of assets against inflation. Inflation is a risk in just the same way as volatility.
“Better education and understanding of this area is a huge issue for the UK population. We believe that those who take advantage of the free financial surgeries available this week will gain greater insight into how to organise their financial affairs to cope more readily with economic change.”
Financial Planning Week continues until Saturday.