The report from Aegon also said those who have had financial advice are more likely to agree that they are doing everything to secure their financial future (49%) compared to just 37% of those who have not.
The financial wellbeing research from Aegon UK used an established methodology from the US Consumer Financial Protection Bureau adapted for the UK to measure financial wellbeing in its survey with YouGov. This measure is based on a variety of factors, including respondents’ capacity to absorb a financial shock and their ability to make choices that allow them to enjoy life.
Nearly half of those surveyed who had not taken financial advice (49%) were concerned that the money they have now or will save will not last. Just 37% of those who have taken financial advice shared these concerns.
Those who had taken financial advice were also more likely to be able to financial handle a major unexpected expense (33%), compared to those who have not (23%).
Ronnie Taylor, chief distribution officer at Aegon, said: “We wanted to understand what impact receiving financial advice has on people’s levels of financial wellbeing. Our report shows a positive relationship between financial advice and financial wellbeing, recognising that advisers play a key role in supporting the financial wellbeing of their clients.
“It suggests that those who have engaged with a financial adviser about pensions, investments or protection are more likely to enjoy life because of the way they are managing their money, have money left over at the end of the month and are able to handle an unexpected expense.
“Financial wellbeing is the link between money and happiness but it’s not just about the amount of money someone has now, it’s about their plans for the future. The people who feel in control of their long-term financial plans and their relationship with money, will have a more positive outlook. So, for those wanting to focus less on money worries and more on enjoyment in life, financial advice could help give them the peace of mind to do so.”
The report also touched on the impact that financial worry has on productivity in the workplace. It found that employees who had not taken financial advice were more distracted at work worrying about money than those who have taken financial advice. Those with money worries who had taken financial advice were also less likely to struggle with tasks that are otherwise routine than those who had not taken financial advice.
Chris Budd, chairman of the Initiative for Financial Wellbeing said: “Financial advice and Financial Planning in the UK is developing rapidly. It is no longer enough to just talk to clients about investments, pensions and tax. This research from Aegon is hugely important in providing the evidence for central premise of the Initiative for Financial Wellbeing (IFW), that talking to clients about their relationship to money – about their financial wellbeing – significantly enhances the impact of financial advice.”
The survey was undertaken by YouGov Plc. Total sample size was 2,000 employees. Fieldwork was undertaken between 5 - 16 December 2019. The survey was carried out online. The figures have been weighted and are representative of British business size.