Updated 03 September 2020
One little decision can change your life forever, whether it’s choosing to start a family, or buying an annuity to give you an income in retirement. We’ve been thinking a lot about the moments that matter, and the moments when people are most likely to seek professional advice. So what have we learned?
‘Moment’ is a strange word. Is it a little thing, or something big? We say, ‘It’ll only take a moment.’ But then we talk about a ‘momentous event’. Maybe there’s a lesson here: that the most important events in life can happen very quickly, before you have a chance to fully prepare. That’s why we’ve recently been talking about ‘Advice Moments’. These are the pivotal times in people’s lives when they stand to gain (or lose) the most, and so can most fully benefit from independent, professional advice. Along the way, we’ve made some curious discoveries.
Our survey found that starting a family had the biggest impact on people’s lives. So much so, that most people seem to forget the massive financial hit that comes with it. The Centre for Economic and Business Research found that the average cost of raising just one child in the UK is comparable to the price of the average house. That’s just 18 years of childhood versus 25 years of mortgage – yet while more than half of our respondents sought financial advice on their mortgage, very few thought to do the same when having kids. Do we need to rethink our approach to parenting?
It was good to see family ranked first, with marriage in second place. Getting hitched is indeed the second biggest life event according to our survey. But again, on the scale of advice-seeking it barely registers. Courting couples obviously don’t want to sour the romance by consulting a financial adviser about their future together – yet on reflection, a little advice at the start might help to keep the romance alive for longer. Not only are weddings expensive, but marriage itself carries a number of financial and tax implications, where financial advice can help you to maximise the potential benefits.
When people told us they hadn’t taken financial advice in a particular situation, we asked them why not. The commonest answer was that they felt confident making their own decisions. But many, particularly among younger adults, responded that they ‘forgot’ to take financial advice – revealing an awareness that they should have. This ties in with a finding that up to a fifth of those who didn’t take advice ended up regretting it later. This suggests that confidence in one’s own financial knowledge can sometimes be misplaced – but the discovery often comes too late to do anything about it.
We asked a range of different age groups about what they hoped to do in their retirement. It wasn’t a huge surprise to find that travel and exotic holidays featured highly. But many in our younger age group (18-34 year olds) were also keen to help their children and grandchildren get on the property ladder, and to help fund their grandchildren’s education. Strangely (or perhaps not) this noble ambition declined steeply among 35-55 year olds, and tailed off even more among the oldest age group. So are we ageing into a generation of skinflints? Or is the older generation just as caring, but simply more realistic about what they can and can’t afford? Or maybe those 18-34 year olds are just projecting their own wishes that someone would help them out. Still, if they put financial plans in place now, they might be in a position to make good on their promises…
We discovered that men were slightly more likely than women to seek financial advice across a range of different circumstances. However, men also gave notably different reasons for not seeking advice. Men who didn’t choose advice generally felt that it wouldn’t have made a difference to their final decision. Many women said this too, but not so large a proportion – they were more likely to say it hadn’t occurred to them, or that they’d forgotten to do so. So are women more ready to admit that they don’t have all the answers?
Big decisions can only take a moment – but the consequences tend to last a long time. By considering the financial aspect of each big event and seeking professional advice, we’re not ‘ruining the moment’ – rather, we’re making sure that it’s a moment we’ll remember for the right reasons.
Search for an independent adviser today on unbiased.co.uk. Our adviser checklist can help you find the right one for you. You can also take advantage of a free financial health check, and £50 off any subsequent advice: www.unbiased.co.uk/free-financial-check