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Financial Ignorance is Bliss for UK Consumers
Nearly four in five people in the UK believe that the public is ill-informed about financial matters, according to new findings from Brahm Research in conjunction with Cicero Consulting. The report foreshadows the publication by the country's Financial Services Authority (FSA) of a 'Financial Capability strategy'.
Brahm investigated financial understanding against a background of mounting consumer debt, and found that 79% of people in Britain believe that the quality of financial education is poor. 'The vast majority of people (85%) believe it is the individual who is ultimately responsible for decisions made when borrowing money or investing', according to Director Robin Horsfield. This despite the UK's much vaunted 'blame culture'.
Eighty-eight percent of respondents said they felt secure in their jobs - perhaps because the country is currently enjoying high levels of employment, unlike in the previous two decades. Similarly, the fact that Britain has largely remained untouched by the global recession probably accounts for the response that 84% feel financially secure. However, Horsfield says the findings suggest that such high levels of job and financial security have lulled people into a false sense of security.
'Exactly half of our sample were debt-free. Of those in debt, only 2% recognised that they would suffer financial hardship if interest rates rose by 2%. And one in four only focuses on what they can afford each month, rather than the total sum borrowed.
'These are alarming results in that they highlight the task that the FSA has ahead of it, together with financial services providers, and maybe schools, colleges and employers in educating consumers about basic financial information to enable them to make informed decisions', concludes Horsfield.
Brahm, whose Web site is at www.brahm.com, surveyed 1,000 UK consumers in April 2004, using CATI. More information and a downloadable copy of the report are available from www.cicero-europe.com
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