Brits are ’Financial Fantasists’ Who Fail to Plan for the Future
A third of Brits (33%) are financial fantastists, gambling with their security by expecting to earn higher salaries in the future, borrowing money or expecting to receive a windfall or inheritance, instead of making a detailed financial plan for the years ahead, according to the NS&I Quarterly Savings Survey (spring 2007), published today (15 June).
The Quarterly Savings Survey has identified a group of financial fantasists who, when asked if they have money worries, said: “I don’t worry about my current financial situation because: I expect to be earning more in the future (24%), I expect to always be able to borrow what I need (5%), I expect to receive a windfall or inheritance (4%)"
A further one in six people (15%) say they do not even bother to think about their finances.
The Quarterly Savings Survey has also found that more than half (55%) of British people say they have not made any financial plans for their future.
When asked “Do you have a financial plan for the future?”,
- 55% said “No”.
- 11% said “ Yes, but it is very vague ”,
- 21% said “ Yes, it’s a work in progress”
- 11% said “ Yes, I have a detailed plan ”.
Just one in 10 people (11%) say they have a detailed financial plan for their future but the majority (55%) say they have no plan and just under a third (32%) say their plan is either vague or a work in progress.
And just under two in five people (39%) who have plans have only planned as far ahead as five years.
Dax Harkins, senior savings strategist at National Savings & Investments, said: “It’s a real concern that such a high percentage of people haven’t made a financial plan for their future, and even more worrying that a significant number are basing their financial security on their future earnings potential.
“There’s never any guarantee that people will earn more as they get older so it’s really important that people start their financial planning and start saving as early as possible.”
Women are taking the greatest risk with their financial planning, with nearly two-thirds (61%) saying they have no financial arrangements for their future, compared to half (50%) of men. Widowed, divorced and separated people are also in the high-risk group, with 70% having made no financial plans.
According to the Quarterly Savings Survey, more than one in five (22%) women do not worry about their current financial situation because they expect to be earning more in the future, compared to more than one in four men (27%).
The Quarterly Savings Survey has also found that the need for financial planning only becomes a reality once people reach their mid to late-40s, with 54% of 45-54s saying they do have a plan, whether it is vague or detailed, but still 45% of people in this age group say they do not have a financial plan for the future.
Overall, more than a third of people (35%) report that they worry about their finances but do nothing about it.
The NS&I spring 2007 Quarterly Savings Survey also reveals that just over one in 10 (12%) people do not have any savings at all, while just over a fifth (21%) have less than £1,000.
And just over one in 10 people (13%) who have less than £5,000 in savings believe they are financially secure.
With just under one in three people (30%) saying they do not have enough in savings to cope in a financial emergency, Dax Harkins continues: “A number of people in Britain who have relatively small amounts of money in savings think they are comfortably well off, but these people may need to consider whether this amount of money would be sufficient for them to cope in the event of a financial emergency. In some cases, these people may find that they do not actually have enough money to keep them afloat should something serious happen.”
NS&I is one of the UK’s largest financial providers with 27 million customers and £80 billion invested. It is best known for Premium Bonds, which recently celebrated the 50th anniversary since the first draw in June 1957, but also offers Savings Certificates, Direct ISA, Guaranteed Equity Bonds and Children’s Bonus Bonds in its range. All products offer 100% security, because they are backed by HM Treasury. NS&I is also sole event sponsor of BBC Proms in the Park, held at five sites across Britain on 8 September 2007.
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