the savings gap
TRANSCRIPT
“You don’t know who’s swimming naked until the tide goes out”Warren Buffett
“You don’t know who’s swimming naked until the tide goes out”Warren Buffett Ron Wheatcroft
Technical Manager
Andy GlazierHead of Consensus Research
Consensus ResearchPriory House / Cloisters Business Centre,8 Battersea Park Road / London / SW8 4BGTel: +44 (0)20 7627 7830 Fax: +44 (0)20 7627 [email protected]
MRS Financial Services Conference, October 2010
The cost of doing nothing
Financial planning for later life
At least we’re in tune with the UK consumer …
Can’t afford to put anything away at
the moment
Sorted out my finances; think
I’m well prepared
Main concerns for the future
Losing job
No financial worries
Consumers Industry
10%
41%45%
2%
32%
14%
61%
2%
In the event of your illness/disability/death, how would your family fare?
Would struggle
9%9%71%71%
Well/reasonably positioned
Everything’s fine then?
Why do consumers think all is fine?
36%
Adequateinsurance
33%
Adequatesavings
14%
House is worthenough
Well, everything’s not exactly ‘fine’ ...
2002 = £130bn
per annum
2009 = £190bn
per annum
UK income protection gap
The European ‘mortality gap’ is estimated to be some €10,000bn
And on a continental scale …
Why the disconnect?
Price of protection
Deep-rooted lack of engagement with the
risks and consequences
Deep-rooted lack of engagement with the
risks and consequences
48%
21%
Don’t need it Haven’t thought about it
Life cover
Deep-rooted lack of engagement with the risks and consequencesDeep-rooted lack of engagement with the risks and consequences
Price of protection
Why the disconnect?
26%
Can’t afford it
Why the disconnect?
Lack of understanding
“I’ve got income protection. The two times I’ve been made redundant, I’ve claimed on it.”
Consumer, 45+
Lack of understandingLack of understanding
Lack of understandingLack of understanding
Lloyd’s of London
Age Concern The Post Office
Martin Lewis
Allied Dunbar
Financial Ombudsman
Scottish Equity
Which?
Baines & Ernst
Why the disconnect?
Lack oftrust
RW
“Why should I bother [with CI]. If something really terrible happened then we couldn't get anything for it anyway because it wasn't bad enough.”Consumer, 35 – 44
“If I understand what I am buying it makes me trust them [insurance companies].”Consumer, 21- 34
Lack of trustLack of trustLack of trust
Where to now?
Fill in the gaps ..........
Education
Re-establish trust
Regulation of distribution“The traditional model of the IFA looks to me like a doomed species. I think there will be a drift away from old fashioned financial advice. The regulatory requirements on IFAs are so great, the cost of giving advice is so great and I cannot imagine why anyone would want to do it” Lord Newby
Where to now?
High street names movinginto protection?
B2C platforms into protection?
Europe ...................
The workplace?
“You don’t know who’s swimming naked until the tide goes out”Warren Buffett
“You don’t know who’s swimming naked until the tide goes out”Warren Buffett Ron Wheatcroft
Technical Manager
Andy GlazierHead of Consensus Research
Consensus ResearchPriory House / Cloisters Business Centre,8 Battersea Park Road / London / SW8 4BGTel: +44 (0)20 7627 7830 Fax: +44 (0)20 7627 [email protected]
MRS Financial Services Conference, October 2010