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Half of 35 to 45 year olds not in control of finances

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More than half of Britons aged 35 to 45 do not feel fully in control of their finances, according to a survey commissioned by F&C Investments.

The study, conducted online by market research specialist www.OnePoll.com, questioned 3,000 35-45 year olds about various aspects of their financial lives.

Overall, just fewer than 50 per cent said they felt in control of their finances, with a little over 36 per cent saying they felt a degree of control and 14 per cent saying they did not feel at all in control.
 
Men were more confident than women, with 61 per cent saying they felt in control compared with 43 per cent of women. And while 57 per cent of Londoners feel they are financially sorted, those in the East Midlands were least confident, with nearly 18 per cent saying they did not feel in control at all.
 
The study looked at various aspects of people’s finances, from wills, life insurance and borrowing to rainy day savings, pensions and other investments.
 
Across the board, just 14 per cent said they had both a will and adequate life insurance to ensure their family’s financial security, with 22 per cent having neither a will nor adequate life insurance. Men were more likely to have made a will but have inadequate life insurance compared with women (20 per cent versus eight per cent), whereas women were more likely than men to have enough insurance but no will (28 per cent versus 24 per cent).

People in the West Midlands and East Anglia (19 per cent and 18 per cent respectively) were most likely to have both a will and adequate life insurance, with the figure dropping to just 5.5 per cent for those in Northern Ireland.
 
Almost a third of respondents with borrowings were either a little worried about their level of debt or were actually finding it hard to keep up repayments, with those in Northern Ireland (nearly 44 per cent) feeling the most strain. However, nationwide more than half of respondents had either no borrowings at all, or none apart from their mortgage.
 
Almost a third has enough rainy day cash on deposit to fund several months’ outgoings, although this was the case for more men (40 per cent) than women (27 per cent). Some 34 per cent of women and a quarter of men had no savings to speak of.
 
A quarter of women are relying on the State pension to keep them in old age, compared with 20 per cent of men, although a third of both men and women are contributing to an occupational pension.

Only four per cent of women and six per cent of men have both workplace and personal pensions, in spite of the freedoms introduced by A-Day in 2006 to hold both types of pension concurrently. Some 38 per cent of women said they were not at all confident that their retirement provisions would be sufficient, compared with 23 per cent of men, while 27 per cent of men but just ten per cent of women said they were confident they would have enough money to be comfortable.
 
Three-quarters of women have no investments other than cash on deposit and any pension arrangements. The same is true for 58 per cent of men. Regionally, Londoners were the most likely to have other investments (41 per cent), compared with only 21 per cent in the North West.
 
Of those respondents who did have other investments, men were most likely to favour National Savings products such as Premium Bonds (36 per cent), with around a quarter of both men and women opting for stocks and shares. Women have the edge over men when it comes to property, with 14 per cent investing in buy-to-let compared with eight per cent of men. Overall, just 11 per cent of respondents held more than one type of investment.
 
Asked what their intentions were for the coming year, 41 per cent said they were not planning to increase their savings or investments. Thirty five per cent of women and 26 per cent of men said they would open or put more in a savings account, with 17 per cent of men compared with just three per cent of women saying they would put more in unit trusts/Oeics, investment trusts or shares.
 
Scott Stevens, head of global wholesale and marketing at F&C Investments, says: “While some of the results of this survey are encouraging, there is a real need for people in this age group to sort their financial lives out. It is unthinkable that almost a quarter of people are still planning to rely on the State pension, when it is entirely possible this safety net will not even exist in its current form by the time they retire. And with life expectancy continuing to rise, leaving it until later middle age to start saving for retirement is not a viable option.”
 
F&C has produced a Financial Life Guide aimed at 35 to 45 year olds, designed to help people plan for a more secure financial future. Structured as a 12-step plan, the guide contains suggestions on all aspects of financial planning, from protection to savings, pensions and investments. The guide also contains information on F&C’s range of investment trusts.

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