The TISA and EY report, 'This Time It's Personal', found that nearly 1 in 2 unadvised UK consumers (46%) have low confidence in making investment decisions due to lack of guidance.

There is also sizeable gender gap in people deciding where to put their money, according to new research.

Unadvised women were most likely to say they feel “overwhelmed by the range of financial options available” (62% of females v 47% of males).  

TISA wants amendments to FCA advice regulations to allow pension and investment firms to provide consumers with more "personalised guidance support services" to help them choose investment products. 

It says existing regulations mean firms are heavily restricted in the way they can personalise support. 

TISA says it is not realistic to expect a relatively small number of regulated advisers to meet the advice gap with the FCA estimating 38m people are not using any formal support to assist them with their finances.

According to the research, women were significantly more likely than men to “struggle to know where to start” when it comes to making investment decisions (24% for females vs 16% for males).  

Age is also a significant factor with savers younger than 50 found to be significantly more likely to agree that they feel “overwhelmed by the range of financial options available” (63% for people younger than 50 vs 44% who are over 50). 

TISA and EY Seren (EY’s customer experience agency) say their research points to a significant ‘confidence gap’ affecting consumers’ ability to make long-term savings and investment decisions due to lack of support and guidance.  

The research points to women and consumers under the age of 50 being the most “dramatically affected.”  

The research suggest that unless steps are taking to help less confident groups many will be left behind.

Interviews among consumers found feelings of ‘powerlessness’ and challenges in making financial decisions. 

Some participants felt unable to improve their financial situation without making changes to aspects of their life not always within reach, for example, raising their salary.  

Many felt "helpless and fatigued" by the overwhelming amount of information and options available after researching savings and investments resources. This led to ‘analysis paralysis’ and inaction, with participants choosing to prioritise shorter-term financial goals, focusing on 'one thing at a time'. 

Among the top drivers for lack of confidence in making savings and investment decisions were: 

1) Risk of losing money

2) Finding it too complex and confusing 

3) Not knowing enough about the options

When it comes to getting advice or guidance the research suggested many people were relying on potentially unreliable sources. Around 1 in 5 (20% for savings, 18% for investments) relied on friends and family for savings and investment advice and about 1 in 5 each relied on online forums or social media.

Millennials (those aged 25-34) were significantly more likely to feel “embarrassed by their lack of knowledge” (28%) compared to the overall sample, compounding the “under-50 confidence gap”. 

Prakash Chandramohan, TISA strategy director, said: “A key reason for commissioning this research was to explore the issues being faced by unadvised consumers when accessing support to make savings and investment decisions.  

“The findings were stark, concerning but also not surprising – with significant propositions of consumers feeling worry, overwhelmed, defeated before they start and not even knowing where to start.  The provision for consumers is clearly not working for the vast majority of people, particularly those who do not seek financial advice.”