Just 6% of financial advisers cited Brexit as the number one risk, while only 1% saw the current political climate as the biggest risk.
Instead a much longer-term trend was seen as the biggest threat to the population’s financial security. Over half (52%) of the 100 advisers polled thought not planning for the long-term future from an early enough age was the biggest threat. This comes as official figures released earlier this year found that households are saving the lowest proportion of their income in over 60 years**.
Other long-term issues were identified as the second and third biggest risks. 20% of advisers thought our ageing society and increased life expectancy were the greatest threat with 7% citing the greatest risk as the government needing to cut costs on items like the level of state pension, with funding social care (6%) closely following. State pension payments are a major expense for the government and financial advisers are no doubt aware that earlier this year the Government Actuary Department found that the National Insurance fund which is used to make these payments is currently set to be exhausted by the early 2030s, unless the system is reformed.
Steven Cameron, Pensions Director at Aegon said: “Brexit and political uncertainty seem to be dominant concerns at the moment. While their impact over the next couple of years is hard to predict, it’s actually another long term and well known issue that is worrying financial advisers more and that’s whether people are starting early enough with planning their finances for the long-term.
“In today’s world, more than ever before, individuals are expected to take responsibility for their own financial future. Gone are the days of employers offering generous defined benefit pension schemes which meant individuals didn’t have to think about how they’d fund their retirement. And the Government is facing up to the costs of an ageing society by increasing state pension age.
“Equally, today’s younger generations face greater financial challenges than previous generations, whether from student debt or getting on the housing ladder.
“So it’s not surprising that financial advisers see the biggest threat to the UK population’s long term financial security as leaving it too late to start planning your finances. To someone in their 20s, retiring in their 70s will be far down the priority list. But making a start, including making the most of workplace auto-enrolment pension schemes, can make a big difference longer term. We can’t afford to let Brexit uncertainty be seen as a further reason to delay.”
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