Request a call back

Callback Form

For more information or advice, please fill in your details below and we will contact you shortly.

Sending
×

New study uncovers financial vulnerability in five million UK households

Delayed life milestones and lack of planning pose significant risks

New research has revealed that five million childless households in the UK currently lack life insurance, pensions or savings[1]. This alarming statistic underscores a broader shift in how families are structured and how financial priorities are set across the nation.

Traditionally, significant life events such as marriage, parenthood and homeownership have catalysed individuals to take serious steps in securing their financial futures.

However, with many now opting to delay these milestones, the conventional triggers for financial planning are also being postponed. This delay is having tangible consequences on the overall financial wellbeing of these households, making them more vulnerable to unexpected financial hardships.

Key financial safeguards

The evolving dynamics of family life are causing a paradigm shift in financial engagement. For instance, it’s becoming increasingly common for individuals to prioritise career advancement or personal freedom over settling down early. While this shift allows for greater personal and professional development, it also means that key financial safeguards such as life insurance and pension plans are often not put in place until much later in life, if at all. This lack of early financial planning leaves many without a safety net, as the research shows.
The delay in securing financial products that were once considered essential is not just a personal risk but a societal one, potentially leading to a generation ill-prepared for future financial challenges.

Delays in key life milestones

An estimated 6.5 million UK adults (12%) postpone important financial decisions until they marry, have children or buy a home. However, societal changes mean these milestones are increasingly delayed. The research identified that official records show that the average age for having a first child is now 32, the highest it has ever been. Similarly, the average age for first-time homebuyers has risen to 34, the highest in decades.
People in the UK are also marrying later in life. Women now typically get married at 33 and men at 35, up from averages of 29 and 32 in the year 2000. This trend poses potential risks to financial resilience.

Financial resilience at risk

Delaying key life milestones often means postponing serious financial planning. Two out of five UK adults who have not started a family (21%) cite this as a reason for delaying crucial financial decisions. This includes taking out protection insurance (22%), starting a pension (23%) and contributing to savings (18%).

A significant portion of the population is delaying these decisions until marriage (11%) or homeownership (17%). Consequently, financial engagement among UK adults is declining, with 35.7 million adults not regularly checking their finances.

Impact on financial wellbeing

The lack of engagement has serious ramifications. Without protection insurance, millions of families are left without a safety net. Recent data indicates that half of all critical illness claims occur before age 50, highlighting the importance of early financial planning. Additionally, delaying pension contributions is setting millions of young people toward a retirement shortfall of more than £25,000 annually by the 2060s[2].

People are now waiting until midlife to focus on their finances, with the average UK adult only engaging with their financial planning at age 48. This delay increases the risk of missing significant insurance, savings and investment opportunities.

The risks of waiting

Delaying financial engagement until traditional life milestones like marriage and parenthood can lead to missed opportunities. Five million childless households currently lack essential financial products, and this delay in financial planning is already being felt across the UK.

The reluctance to save contributes to 30% of UK adults having no savings or investments or less than £1,000 set aside for emergencies[3]. By starting financial planning earlier, individuals can build a stronger financial foundation and be better equipped to handle life’s uncertainties.

Source data:
[1] Mustard research consisting of a nationally representative survey of 2,000 UK adults conducted in January 2024.
[2] Analysis conducted by Legal & General based on Opinium Research conducted amongst 2,000 online interviews of people aged 22-32 in August 2023. Income based on Legal & General annuities.
[3] https://www.fca.org.uk/publication/financial-lives/financial-lives-survey-2022-key-findings.pdf

THIS ARTICLE DOES NOT CONSTITUTE TAX, LEGAL OR FINANCIAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH. AND SHOULD NOT BE RELIED UPON AS SUCH. TAX TREATMENT DEPENDS ON THE INDIVIDUAL CIRCUMSTANCES OF EACH CLIENT AND MAY BE SUBJECT TO CHANGE IN THE FUTURE. FOR GUIDANCE, SEEK PROFESSIONAL ADVICE.

Adam Reeves

Author: Adam Reeves

DipPFS Cert CII (MP&ER)
Independent Financial Planner, Wealth Manager, Director

Last updated on

Read our reviews

Vouched For
×

Adam was quick to assess & understand my situation, and was able to discuss & communicate in a very concise and simple way the various options available to me, taking time for me to understand and clarify where necessary. My understanding & knowledge of taxation & pensions has increased significantly allowing me to feel much happier making financial decisions for the future.

Rob – West Sussex

Adam and his team undertook in-depth research into our existing QROPS schemes and clearly set out both pros and cons of transferring the funds back to the UK. Having decided to go ahead with the transfer, Adam and his team worked extremely hard to facilitate the transfer. The QROPS pension trustees were not always the most professional or responsive organisation – however we were very grateful for the perseverance and commitment that Adam showed us as clients.

Jonathan – East Sussex

Adam offered a range of financial products , the one he suggested was affordable and proved to be a good choice.  Returns on investments have exceeded my expectations, based on Adam’s advice and guidance. Profits have enabled house improvements to take place.

David - Surrey

Adam arranged an appointment very timely, he explained his role and qualifications as an IFA giving me reassurance , we went through my retirement and investment goals. Adam discussed my options explaining in great detail, I felt relaxed during our discussions allowing me to fully understand my choices. I feel very confident in the financial advice allowing me to enjoy my retirement.

I was very happy with Adam’s recommendations and explanations of financial products which would suit my retirement goals, I feel this has helped me review and reduce my financial risk as I reach retirement, leaving me feeling confident that I can enjoy my retirement plans.

Ron – West Sussex

After initial meeting Adam put together a very detailed and thorough written plan. At our second meeting he went through the whole booklet and explained everything in layman’s terms which made it a lot easier to understand.

I am very happy with everything that was suggested and put in place especially with something as big and important as pensions. Adam and his team have taken a huge weight off my shoulders and I would highly recommend their services to anyone needing help with their financial planning and pension.  Adam couldn’t have been more helpful, and even came outside his normal area to meet me on a number of occasions.

Richard - Kent

Unfortunately I had to claim on my critical illness insurance due to my wife being ill and because of the sound advice Adam gave in acquiring this insurance we ended up being financially safe through a tough time.

Steve - Kent

Adam did a review of our financial situation, confirmed that Flexible Drawdown best suited our needs as a family, and then did all the research into the best product for us. He will continue to monitor it for me. He acted extremely promptly because we had a deadline for requiring the lump sum; went out of his way arranging meetings during non-office hours, was professional yet friendly and explained a difficult subject very well.

Clare – East Sussex

Adam did a thorough review of my pension policies, clearly explained how well they had performed, how flexible they were, how the market regulation has changed, and, crucially, what the tax implications would be if I were to leave them untouched. He accurately assessed my attitude to risk and recommended an up-to-date solution that will offer me the greatest flexibility at retirement.

Greg – East Sussex
Read all our reviews here
×
Indices
Value Move   %     
FTSE 100
8,282.52-8.34 stock arrow-0.10 stock arrow
FTSE All Share
4,523.17-4.97 stock arrow-0.11 stock arrow
Currencies
Value Move   %     
Euro
1.190.00 stock arrow0.21 stock arrow
United States Dollar
1.320.00 stock arrow0.16 stock arrow

Market Data

Data is compiled by Adviser Portals Ltd every 60 minutes. Information is not realtime. Last updated: 04/10/2024 at 08:00 AM
×