With the Bank of England poised to raise interest rates for the tenth time in a row and to their highest level since the 2008 financial crisis later this week, Opinium’s latest poll reveals that half of financial advisers (50%) think their clients will be worse off this year compared to 2022.
Yet a third (32%) of IFAs think their clients will be better off this year.
When looking ahead to the rest of the year, over three quarters (77%) of IFAs think that high inflation and the cost-of-living crisis will have the biggest impact on their clients, followed by market volatility impacting returns from investments (49%) and uncertainty in the housing market and with mortgage rates (39%). Almost a third (31%) believe the cuts to capital gains tax allowance will have an impact, and 16% think cuts to dividend tax allowance will affect their clients too. A fifth (20%) expect higher interest on savings account to have a big impact on their clients.
Alexa Nightingale, Head of Financial Services research at Opinium commented: “As interest rates are predicted to hit levels not seen since the 2008 financial crisis, it’s no surprise that a majority of financial advisors expect their clients to suffer financially this year. There are a range of factors impacting finances, from high inflation and the cost-of-living, to tax allowance cuts, and advisors will have to navigate their clients through all of this in 2023.”
The research was carried out using Opinium’s IFA omnibus, the UK’s only dedicated research community of IFAs.