As the countdown to the first Budget of a new government begins, attention is focused on two things: how will they balance the books while at the same time find enough down the fiscal sofa to invest in longer-term economic growth for the UK?
It is a dilemma that will resonate with households up and down the country. How to budget for the day-to-day with less while looking to create some security for the future.
Unlike policymakers, homemakers cannot pull on advice from benches of Westminster experts. In fact, the vast majority have no help at all with securing their financial futures.
Financial Conduct Authority data shows just 8 per cent of all UK adults – that is 4.4m people – currently receive any sort of professional financial advice.
Meanwhile, at St. James’s Place, our own research suggests 24.6mn people have never received professional financial advice, or indeed broader financial guidance, of any kind.
Maybe this does not matter. Maybe the millions of young professionals, new parents, and soon-to-be-retirees are looking to more digital ways to help themselves plan their finances. They have a vast wealth of information at their fingertips, they can call on artificial intelligence for advice at any time – and enjoy better access than ever to DIY investing.
Yet the reality is very few people are taking those leaps or know which sources to trust. People doing it for themselves are in the minority and levels of confidence are low when it comes to deciding where to invest, how to build up a retirement fund or, on the flip side, how to manage and recover from debt.
The stakes can feel even higher and more overwhelming when times are hard.
All the while the wealth gap between the generations continues to grow. The first rung of the housing ladder gets further out of reach. The responsibility for our retirements falls more firmly on our own shoulders. It means the decisions we take about our money look set to feel even more nerve-wracking.
We see this fact echoed in our own research, which reveals the barriers preventing millions of people from seeking direct professional advice. For instance, telling ourselves that our timing’s off, that is: 'I don’t need to think about my pension yet.'
But the biggest barrier of all is also the most problematic: that advice is just "not for people like them". A third (33 per cent) of UK adults are holding back from professional advice, believing their personal situation is too "simple" to need it.
Of course, professional advice will not be an option for all, but, for many, perceptions – fuelled by what society is echoing about who is or is not worthy of financial advice – are preventing them from taking steps that could transform their circumstances.
From how they plan for a more comfortable retirement, supporting choices for their kids with education and opportunities to grow skills, kick-starting their own business venture, or overcoming a life hurdle, like divorce or bereavement.
