A third of people would save or invest more if it was easier to transfer money and open saving or investment products
• 13% of Brits do not know how to check the state of their finances at any given time, according to pan-industry group
• Yet, 84% of Brits remain confident in their ability to manage their finances, highlighting a possible mismatch between perception and reality
• Support grows for ‘digital financial services passport’, with almost four in 10 people wanting all of their personal financial details held on one site
• 90% of people are comfortable using technology to manage their finances
New research reveals that 13% of Brits do not know how to check the state of their finances at any given time, according to the latest findings released by a grouping of companies from across the UK financial services industry. The industry group, acting as The Savings and Investments Policy project, (‘TSIP’, ‘the Project’), highlights that despite a perceived inability to determine their personal wealth (or lack of), 8-in-10 people (84%) claim to feel ‘confident’ or ‘very confident’ in their ability to manage their finances.
However, 36% of Brits say that they would find it easier to manage their personal finances if all of their details were held on one online site. This came second to a desire by 39% of people for financial services products to be easier to understand (Table 1).
Nine in ten (90%) people indicated that they feel comfortable using technology to access their finances, but as a warning to financial institutions to not exclude potential savers and investors, those aged 55 years and over were least willing to embrace technology to manage their finances. (Table 2). These findings come ahead of new legislation which from April will offer people unprecedented access to their retirement savings and a much wider range of income options.
According to TSIP, almost a third (31%) of people, equivalent to almost 15 million adults, would save more if the process of opening savings / investment products and transferring money was made easier. Significantly, almost half of those aged 18 to 24 would save more if the process was made easier. At a time when almost one fifth (19%) of people do not save and around one-in-ten (11%) just set money aside at home (under the mattress or in a money box), the TSIP project group is considering ways that technology can be harnessed to help rebuild consumer confidence and trust in long term savings.
One option being considered by TSIP is a ‘digital financial services passport’, which is gaining support from across the financial services industry as well as with savers. A digital passport would authenticate individuals’ identity and enable savers to more easily open new products and safely transfer money between products and organisations. This would improve consumer trust and security in digital services and also help reduce the costs associated with internal processes and systems.
The UK is progressively moving towards greater adoption of online services. The UK Government’s Digital Strategy sets out the potential opportunities to enhance the way that consumers engage with a variety of State run services, including pensions, social benefits, tax and driving licences. The report outlines that a “digital by default” approach to Government services could save between £1.7bn and £1.8bn per year.
Tony Stenning, Chairman of TISA’s Savings and Investments Policy project and Head of UK Retail at BlackRock says:
“Our research reveals that an additional 15 million adults would save more if the process of opening savings / investment products and transferring money was made easier. At a time when we are in the midst of a savings crisis, it is essential that we grasp this now and consider all ways that we can create a culture where it is as easy to save for both young and old generations. We are living in an increasingly digital world and a financial services digital passport is one idea that warrants serious consideration.”
Earlier this year the TSIP project group published a review entitled, ‘Our Financial Future’, setting out how the UK is not only failing to save enough for day-to-day needs, but that it will reach a tipping point in 2035 when those entering retirement will be increasingly less-well-off than earlier generations. The Project, which is being managed by TISA3 (the financial services industry membership association), is stimulating discussion and debate about the role saving plays in securing people’s financial future.
TSIP recently released research showing that for many people their focus remains making ends meet in the face of rising living costs, with four fifths (81%) of people saying that their single biggest barrier to not saving regularly is that they have no disposable income. For women, this percentage is even higher at 83%.
TSIP believes there is a once in a generation opportunity to change people’s attitudes to saving and to develop long-term policies to avert this looming social and economic crisis which is why it is working together with other financial services companies, policy-makers and consumer groups, solutions can be created that meet the needs and aspirations future savers and investors.
Carol Knight, Operations Director, TISA says:
“Whilst technology has played a crucial part in improving access to financial products, we need to ensure that the infrastructure is fit for the ever-increasing digital demands of savers and investors. Financial institutions must continue to drive innovation and the regulator has a role in ensuring that this innovation is in consumers’ best interest.
“As an industry we need to consider more dynamic solutions such as the financial services digital passport. Until change occurs and is implemented, one of the primary challenges the industry faces is reigniting the savings culture by making it easy for people to save very small levels of money frequently. Unless financial products become more accessible to all UK consumers, the savings gap will widen.”
Please visit the Savings and Investments Policy project website, www.tisa.uk.com/savings-investments.html for further details about the project.
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For further information, please contact:
TISA’s Savings and Investments Policy project
Tony Stenning – Tel: +44 20 7743 2922, Mobile: +44 7841 220 365
Newgate Communications
Deborah Saw / Alistair Kellie – Tel: +4420 7680 6558, Mobile: +447801 234 598 Email: Deborah.saw@newgatecomms.com / Alistair.kellie@newgatecomms.com
Notes for Editors
Table 1:
What could be done to make it easier to manage all your personal finances online? Proportion of UK adults
Products and services easy to understand 39%
All personal financial details held on one site 36%
Standardised financial products 18%
It is already easy to manage finances online 7%
Source: Consumer Intelligence, 4th – 5th December 2014
Table 2:
Which elements of your finances do you manage using technology (e.g. PC, phone, tablet, mobile etc.) rather than face-to-face? Proportion of UK adults
Current account 84%
Savings account 61%
Insurance 42%
Investments 30%
Pension 13%
I am not comfortable using technology to access finances 10%
Source: Consumer Intelligence, 4th – 5th December 2014
1. The TSIP project group commissioned Consumer Intelligence to conduct a survey with 2,161 people online between 4th – 5th December 2014.
2. The Savings and Investments Policy project is working with a wide range of financial service companies, trade bodies and consumer groups to develop these pan-industry proposals. It is directed by an Executive Committee formed of 16 leading financial services companies including Aviva, AXA Wealth, BNY Mellon, BlackRock, Ernst Young, Henderson, J.P. Morgan Asset Management, L&G, Lloyds Banking, Nationwide, Northern Trust, Old Mutual, the international law firm, Pinsent Masons, RBS, Threadneedle Investments and TISA.
3. TISA is a not-for-profit membership association operating within the financial services industry. We represent the interests of over 145 member firms involved in the supply and distribution of savings and investment products and services.TISA has a highly successful track record in working cooperatively with government, regulators, HMT, DWP and HMRC to improve the performance of the industry and the outcomes for consumers. Policy and regulation continues to be the major focus for our members with regard to corporate responsibility.
TISA and its members’ remit is evolving into a clearer focus on pro-active consultation in the regulatory world in order to influence policy and associated regulation before its creation, rather than reacting to issued policy directives. This will help to ensure a more considered policy creation from the authorities. www.tisa.uk.com