In one of the biggest pieces of consumer personal finance research in history, the Financial Conduct Authority quizzed almost 13,000 individuals on the state of their finances – including how they handle money and how vulnerable they are to threats like rising interest rates and marauding scammers.
Here are the key things you need to know about your finances in 2017:
1. Fraudsters are scamming more than 300 people a day
At first glance, the FCA’s findings show that only a tiny fraction of a percent of the adult population has handed money over to fraudsters – but this means almost 115,000 people may have fallen for scams in the past year alone.
According to the FCA, 23% of respondents said they’d received unsolicited contact from a dubious source – for example, someone claiming to be working for the government or selling unregulated investments.
Of the people contacted, 5% responded to the possible fraudsters – and of the people that responded, 15% ended up sending money. Although this represents only 0.18% of the UK adult population (assuming the responses are representative), it’s clear fraudsters are actively hunting for targets in the UK.
2. People don’t realise they’re paying for investments
Fees are one of the few things you can control about your investments. Most of the time these fees represent a percentage of the value of your portfolio.
As an example, if you have £100,000 in your stocks and shares ISA, and the fees total 1%, it’ll cost you £1,000 this year (depending on how often they are taken and how your portfolio’s value fluctuates).
This means that fees are a direct drag on your investment returns. In some cases, the fees can even amount to more than your total amount of investment growth.
But the FCA found that fewer than half of the people surveyed realised they were incurring fees when taking out an investment ISA in the last two years.
3. People don’t know how hard their savings are working
If you keep one eye on your savings rate, and the other on rates and bonuses available at other banks, you can earn significant returns – though you may need to switch accounts yearly. But the FCA found that a third of respondents did not even know how much they were earning on their savings – meaning they could be missing out on far better rates.
Use our savings booster tool to see how much more you could be earning on your cash.
4. People don’t think complaining will make a difference
Of all the respondents who said they’d experienced a problem with a financial product, only one in five (20%) actually ended up complaining. When asked why they didn’t complain, the major reason was that people felt it was futile – that complaining wouldn’t make any difference.
The truth is, it can never hurt to ask – and if you do nothing, you’re unlikely to get any compensation, even if you’re entitled to it.
See our guide to complaining about poor financial services.
5. People still prefer human contact to machines
Despite the release of ever-more financial apps and online investment options, most people want to speak to an actual human being for financial advice.
Of the people that received financial advice in the 12 months to the survey, only 3% took advice from automated online services, or robo-advisers as they are sometimes known.
Although good-quality advice from a qualified person is invaluable, there are some things you can do yourself to save costs if your needs are relatively straightforward.
As an example, see our cost tables for the most-used online investment websites, or ‘fund supermarkets’.