FSCS consumer research shows one in four are taking more risks with their money due to rising costs of living
FSCS consumer research shows one in four are taking more risks with their money due to rising costs of living
- New research from FSCS shows consumers are taking more risks as they seek to make their money go further in response to the cost of living crisis.
- Pensions are being impacted by changing consumer behaviour as 23% of those with a pension have decreased or stopped contributions in the past few months.
- As 29% of those eligible to draw on their pensions move money out to cover day-to-day expenses, and a further 17% opt to invest this money elsewhere, FSCS’s new report highlights the importance of raising awareness and understanding of how pensions and investments are protected to prevent future harm.
For more than a year now, the UK has experienced a period of rising prices, commonly referred to as the cost of living crisis, as ‘real’ incomes, when adjusted for inflation, have continued to fall since late 2021. With inflation hitting a forty-year high last October, and interest rates hiked up in response, consumer’s short and longer-term financial decisions are being impacted as people seek to make their money go further.
Today, FSCS releases new findings from research conducted with over 4,000 UK adults between September 2022 and February 2023. The research is a useful contribution to the wide range of existing studies on the cost of living crisis and explores the impact of rising costs on consumer attitudes and behaviours towards financial products and how pensions, in particular, are affected.
Lila Pleban, Chief Communications Officer of FSCS said: “Claims involving pensions and investment advice are now the most common claims that FSCS receives and are often the most complex and costly to resolve.
Understanding what consumers are doing today in response to current economic conditions can help us predict what may land at our door in the future, supporting us to find effective solutions that can protect consumers and prevent financial harm.
When money is tight, it’s inevitable that alongside compromises and budget planning some people are likely to take more risks, which could plunge them further into financial difficulties.
Whatever consumers choose to do with their money, it’s important they understand if and how their investments are protected. Sharing knowledge and insights across the industry can help consumers make informed decisions about their finances so they can feel confident their money is safe.”
Find out more and read the full report on the FSCS website: FSCS Consumer Research: Impact of rising cost of living on finances and pensions.
Media enquiries
Please email publicrelations@fscs.org.uk or fscspressoffice@hanovercomms.com