New research of consumers and advisers suggests concerns are growing about the finances of older and more vulnerable people and their abillity to cope with the cost of living challenges.

One in 10 adults say their relatives have made poor financial decisions in the past two years resulting in some form of financial loss.

Consultants AKG, sponsored by Standard Life, carried out a major survey of consumers and advisers earlier this year.

The survey revealed that 45% of UK adults were concerned about the financial decision-making of their more vulnerable relatives as they get older. Nearly a quarter (23%) said overall they believed relatives had made poor financial decisions in the last two years with one in 10 overall saying that the poor financial decisions had resulted in them losing money.

Among those with relatives who have made poor financial decisions, 37% attributed this to a lack of knowledge or understanding, while 31% said their relative lacked access to good advice or guidance.

Almost half of participants (49%) said they were apprehensive about their own financial decision-making capabilities as they aged. 

Additional causes for concern about financial decision-making in older age included:

• illness (30%)
• deteriorating physical health (28%)
• bereavement (19%)

Observations among financial advisers were similar, the survey found, with advisers believing as many as 35% of their clients could be classed as vulnerable.

Chris Hudson, retail intermediary managing director at Standard Life (part of Phoenix Group), said, “The ongoing cost of living crisis has amplified the UK’s problem with low financial awareness and understanding, with  people often more likely to make risky decisions when they are struggling.

“For example, there can be a strong temptation to use long-term savings to cover day-to-day costs. As a result many people, particularly the more vulnerable, are at risk of making poor financial decisions and could become easy targets for scammers. The fact that financial advisers consider over a third of those who do seek advice to be vulnerable is telling – it’s scary to think how many people who are not advised could fall into this category.

“A collective response from providers, regulators, Government, and advisers is needed to help people access advice and empower and educate clients. Crucially, the industry as a whole needs to invest in vulnerability programmes and make sure it’s providing the flexibility needed to treat vulnerable people well.”

Matt Ward, communications director at AKG, said: “We know from this body of research and many others that a wide range of consumers need more help when it comes to understanding and making financial decisions. Access to affordable financial advice remains challenging for many consumers and so outside of the mainstream advice market the financial services industry needs to continue to widen the availability and access to useful information, guidance and advice.”

• Opinium Research surveyed 2000 UK adults online between 14-17 February on behalf of AKG. Results were weighted to be nationally representative. Pureprofile surveyed 100 advisers in February on behalf of AKG.