Britons in need of financial advice

British consumers do not understand financial products and services, according to new research.

14:30 30 November 2004

British consumers do not understand financial products and services, according to new research.

A survey by Mintel found that more than one in five adults (21 per cent) feel they have a poor understanding of financial products, with a further one in 20 (six per cent) admitting they have no understanding whatsoever.

Although around a third (34 per cent) of the population feel they have a good understanding of financial products, with a further 38 per cent believing their understanding is average, this still leaves 13 million adults lacking adequate financial knowledge.

Despite this only half (52 per cent) of the population has the desire to improve their financial understanding.

"With so many consumers facing a pension shortfall and consumer debt increasing, it is worrying that so few people have the desire to improve their financial understanding," comments Paul Davies, senior finance analyst at Mintel .

The research also found that lack of understanding is particularly pronounced among the younger generation, with more than one in three (34 per cent) 18 to 24-year-olds feeling they have little or no understanding of finance.

"This lack of knowledge is likely to become a real problem for Britain's younger generation," Mr Davies added.

"Undoubtedly, today's youth will have to contend with many more financial issues than previous generations. There is not only the prospect of student debt, but the difficulties of getting onto the property ladder and finding affordable car insurance.

"On top of this, there is a greater need for them to be more aware of the importance of planning for their long term future.

"The lack of financial understanding and interest in new products bodes badly for the industry and suggests that the government's targets for simplified savings products are unlikely to be met in the coming years."