InvestmentsDec 1 2015

Naked investors risking another UK financial crisis

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Naked investors risking another UK financial crisis

The UK is at risk of another financial crisis, with 38 per cent of British people polled by TD Direct Investing saying they do not have enough knowledge, confidence or money to invest for their future.

The firm commissioned the Future Foundation to survey 2,762 UK adults, finding that while 81 per cent were aware they should take responsibility for their finances, for the most part they feel incapable of doing so.

Almost one in three people - 31 per cent - have a perception that they do not have enough money to invest, despite most having over £500 in investible assets, with a lack of financial knowledge affecting just under a quarter - 23 per cent.

Across all sections of society, the research highlighted gaps between the desire to do something and the perceived ability to do so, with a quarter of all people surveyed saying they did not feel confident in their ability to make good financial decisions.

The research also unearthed a complete lack of belief that the state will support people in retirement, with only 20 per cent confident that this will happen.

Just 40 per cent believed that they were knowledgeable enough about financial matters to fill the state void, a figure which dropped to 32 per cent when focused on women alone.

John Tracy, chief executive of TD Direct Investing, said the main issue to address is education.

He said: “Most people are familiar with banking products and cash Isas, but not enough people are talking about investing and this is creating this sense of financial paralysis.

“Whilst the findings are worrying, the time is right for people to start taking control with growth in digital and self-direction, more flexibility in terms of pensions and Isas and better education available to consumers who just want to get going.”