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Consumers say lack of advice stops them saving

Piggy-Bank-Savings-UK-700x450.jpgConsumers think they would be saving £134 a month more if they had financial advice, survey of over 1,000 people has found.

The Nottingham Building Society commissioned research shows that 21 per cent of adults say they aren’t saving as much as they could without advice, and are losing out on around £1,600 a year as a result.

Among savers under 35, nearly a third say lack of advice is holding them back from saving, compared to 12 per cent of over 55s.

Many have struggled to get advice, however, with 20 per cent reporting access issues for savings advice and 11 per cent for investment advice.

Nottingham chief executive David Marlow says: “It is very worrying that people are missing out on saving and investing simply because they struggle to get independent advice.

“The recent rate rise and increased competition among providers means there is more choice than ever but at the same time people clearly need more help to decide what is right for them and their individual circumstances.”

As more banks are looking to re-enter the advice market, Nottingham warns that branch closures could stop some getting advice.

Nic Cicutti: Beware banks’ return to advice

Marlow says: ”Branch closures are making it difficult for savers to get the advice they need to make major financial decisions.  As a mutual building society, we have a significant role to play in helping members to plan for the future which is why we are expanding our branch network and providing our unique combination of advice and service all available under one roof.”

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Comments

There are 14 comments at the moment, we would love to hear your opinion too.

  1. £134 a month isn’t a major financial decision.*

    Pay down unsecured debt, increase mortgage repayments to get ahead of the next rate rise, put it in an ISA or premium Bonds/some other NS&I product.

    None of those will set the world on fire but they’re all simple, prudent steps anyone can take without advice that are low-cost and low-risk.

    *If £134 a month IS a major financial decision for you, then you can’t afford financial advice and the above options are likely to be even more sensible courses of action.

    • Absolutely right. But then consumers will make every and any excuse why they don’t save.

      I had the kids of clients coming to me as they couldn’t make ends meet.

      A few minutes chat found out that they were just wasting money:
      1. A Starbucks each morning at £2.50 (ever heard of a thermos?)
      2. Smoking! (at £10 per packet X 3 packs per week)
      3. Gym membership £40 per month. (Use your trainers to go jogging)
      4. Sky TV £35 per month (minimum)

      So that’s £240 odd saved per month without even trying.

      Then of course there are the credit card purchases on which interest is paid. Do you really need the latest headphones? Why did you buy that outfit in a designer boutique when you could have bought from a high street chain? And so on practically at infinitum.

      • I agree with Adam and Harry.
        Most of my clients who have money didn’t actually earn more, they simply spent less and saved more.
        Those few who I have who earn a lot fo moeny, spend very little because they are a combination of two busy or simply more fruggal.Their day to day living cost are often mroe fruggal, but they spend money on non wasting assets they can enjoy and take pleasure from.

  2. As I see it there are three major stumbling blocks stopping people saving; Cost, Advice and Confusing/Burdensome paperwork…

    Consider this against the ease of borrowing or getting into debt…….

    People will always take the route of least resistance its far easier, less aggro, and widely available, to get a £10,000 loan and use the £134.00 a month to pay it off

  3. Geoffrey Hartnell 28th November 2017 at 8:56 am

    It didn’t take a genius to work out that if you abolished commissions on regular savings that sales would fall off the edge of a cliff.
    If Advisers aren’t remunerated for regular savings they simply wont bother unless there is ancillary Business which is more lucrative.

  4. What they really mean is lack of free advice.

    Advice IS widely available they just don’t want to pay for it.

  5. Just because banks and building societies are closing branches doesn’t mean that, for those who realise they could benefit from it, advice isn’t readily available elsewhere, typically from a local independent advice firm. From what I’ve read here and elsewhere, many established local advice firms (mine inluded) are willing to take on young clients of limited means on a long term, loss-leader basis, charging just a nominal fee so as to help them get on the savings ladder. So the idea that such people can’t get advice because their local bank or building society branch has closed really doesn’t wash.

  6. Its got nothing to do with the lack of advice, Its the total lack of Trust by the clients off the banking Sector
    The fundamental change has been the stopping of Interest Only Mortgages, thus people are now paying down debt rather than investing, its gone to far the wrong way, clients should be able to decide which they want, Interest Only or Repayment, I notice the Government are only paying Interest Only on its debt!!

  7. The time and processes required for advisers is too lengthy to allow for this level of saving, just a fact. What is disappointing is that the survey/article infers that it is the advice sector’s fault that people don’t save more! I thought the people who used to go about foisting savings plans on folk were what was wrong with the industry back in the day and yet, here we are apparently with a need for just that type of strategy (with better costed policies I grant you). What a messed up affair it all is and what is with this culture of blaming everyone else for one’s inability to take responsibility and search for a solution to the problems in life…. that’s what the internet is for!

  8. The problem is more fundamental than straightforward lack of advice – saving appears nowhere in today’s consumer driven society.

    I would be surprised if the marketing budget spent on saving amounted to 0.1% of the total UK marketing budget. The pressure to spend and buy is off the scale in comparison with the that for saving.

    Blaming the advice gap is easy and a cop-out. Successive governments must accept their significant portion of blame because every recent government was wanted and needed consumer spending to continue to generate tax revenues. Neither do they want money tied up in bricks and mortar.

    Governments shouldn’t be surprised if consumers do what they’re ask to do – spend.

  9. Well i’m Shocked!!!!!!

    Ive been saving this for a few years now as anyone with an ounce of common sense could see this coming ( sums up the regulator for you). Plus its going to get a lot worse over the years unless theres a major change of
    mentality at the regulators!!!

    An individuals future wealth comes from todays regular savings whether it be investment or pension funds.

    The over zealous regulation, prohibitive costs and mindless bureaucracy (1 – 2 hour client interview before any direction decided )in the financial services & banking industry have forced the industry to say thanks but no thanks to the younger generations wanting to make some form of effort to start accumulating wealth.

    In my experiance people genuinely want to save, have funds available to save & are prepared to listen to the advice to save.

    Unfortunatley, for the advise industry It’s the same process for £50 pcm as it is for £50,000 single investment. So don’t knock the industry for saying sorry we dont want to do that type of business please go away. (In a more polite manner I would add).

    This problem is 100% attributable to the regulator & its getting worse instead of better.

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