"No one can plan for every eventuality, but starting these conversations earlier can give people more time, greater flexibility and more options when circumstances change."
- Amit Joshi - Mattioli Woods
The majority of UK adults believe in starting early to plan for their long-term financial future, but many still do not feel prepared for major potential financial shocks and life events that could arise before retirement, Mattioli Woods has revealed.
Such shocks include needing long-term care or support with everyday living, losing the ability to manage their own finances, supporting an ageing parent or relative, and experiencing a relationship breakdown or divorce.
The research, conducted by YouGov for Mattioli Woods, found that 44% of respondents said they do not feel financially prepared for any of the major life situations presented to them, highlighting a gap between the desire to plan for the future and feeling ready for the financial realities that life can bring.
This sense of unpreparedness rose to 53% among those aged between 45 and 54, compared with 32% of those aged 55 and over.
In addition, women are less likely than men to feel financially prepared. 48% of women said they do not feel prepared, while 40% of men said the same.
When presented with a list of major life events, respondents in Scotland and the North West felt the most financially unprepared at 49%, followed closely by Yorkshire at 48%, the East Midlands at 46%, the South East at 45%, the South West at 44%, the West Midlands at 43%, and the North East at 42%.
Despite these concerns, respondents believed on average that people should start making serious plans for their long-term financial future at the age of 28.5, which Mattioli Woods says suggests UK adults do recognise the value of planning ahead.
As people look ahead to retirement, Mattioli Woods says there is an opportunity to broaden the conversation beyond simply how much money people will need in later life, to include the financial shocks and major life events that could affect them long before retirement arrives.
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"Many people understandably think about financial planning in terms of retirement and making sure they have enough money for later life," Amit Joshi, managing director of wealth at Mattioli Woods, said. "But our research shows that the financial events people feel least prepared for can often happen much earlier.
"Needing long-term care, supporting an ageing relative, experiencing a relationship breakdown or losing the ability to manage your own finances can all have a significant impact on an individual's financial security. These situations are difficult to predict and, understandably, are not always the things people want to think about when planning for the future."
"The fact that people believe serious financial planning should begin before the age of 30 shows there is widespread recognition that planning ahead matters," Amit continued. "However, financial resilience is about more than preparing for a retirement date. A long-term financial plan should also consider what happens if circumstances change along the way.
"Thinking about potential care needs, family responsibilities and what would happen if someone could no longer manage their own affairs can help people and their families feel better prepared for the unexpected.
"No one can plan for every eventuality, but starting these conversations earlier can give people more time, greater flexibility and more options when circumstances change."
