New research from WA Communications has revealed that despite the growing pressures from the cost of living crisis, consumers are overwhelmingly under-informed when it comes to knowing where their pensions and investments are allocated and nearly two thirds of adults can’t tell different financial products apart.
Public relations firm WA Communications surveyed over 2,000 adults in October this year to understand consumer attitudes towards their savings, investments and pensions, and awareness of how their money is being handled. Despite having strong views as to how their money ought to be managed – with 60% of people saying that whether an investment manager operates in an ethical way is important to them and 55% saying they would like their pension to be invested in an ethical and environmentally-sustainable way – most British adults know very little about how their money is being managed.
Nearly two thirds of people (63%) don’t know who manages their pension. This rises to 81% of those closest to retirement, aged over 65, with just 5% of this group saying they know “a great deal” about who manages their pension. The same lack of awareness is echoed, though less dramatically, when it comes to people’s investments. 38% of people admit to knowing very little about where the money in their investment portfolio is invested and this figure rises to nearly half (47%) of women and 52% of those who portfolios are likely to be the largest – those over 65 years.
Compounding this lack of knowledge is the sheer volume of products available on the market. 63% of consumers say that the number of financial products on the market makes it difficult to tell them apart, with nearly a quarter (22%) of those aged between 25-34 strongly agreeing that they are confused by the number of offerings available.
Commenting on these findings, Cat Ommanney, Head of Financial Services at WA Communications said:
“With the rising cost of living, expected increases in mortgage payments and whispers about scrapping the state pension triple lock, financial consumer confidence is more important than ever before. However, our research paints a stark lack of knowledge when it comes to consumers’ understanding of how their money is being managed, with pensions apparently a mystery to most.
“Although we were heartened to note that people are better engaged with their investments, the fact that nearly half of women don’t know what they are investing in should speak volumes to asset managers and financial advisers.
“While the financial services landscape is increasingly crowded, it appears that there exists an understanding gulf between firms and their target audiences. Rather than simply launching new products to market, it’s time for companies to invest in better communication, closing the understanding gap and creating an informed and empowered public.”