Brits lack financial savvy and obsessed with instant gratification

OMD and News UK's report finds that consumers are assuaging Brexit worries with luxury purchases.

The Future of Money: exploring UK's attitude to finance
The Future of Money: exploring UK's attitude to finance

A worryingly large proportion of UK consumers are financially illiterate, steeped in debt and overly obsessed with short-term gratification, according to a study by OMD UK and News UK.

The findings are the result of the agency and media owner's The Future of Money report, which also showed that as political disarray over Brexit heightens, concern about the the UK's departure from the European Union is escalating (up from among 31% of Brits in June 2018 to 50% in December). Accordingly, concern over the economy shot up from 29% to 41% of Brits over the same period.

The study found that 29% of Brits have "little or no financial knowledge" (rising to 44% among 16- to 24-year-olds), while 82% with credit card debt also have unsecured debt elsewhere.

Consumers appear to be more enamoured with short-term gains – buying holidays, gadgets and experiences – at the expense of longer-term financial stability. While 74% said they save on a regular basis, only 53% have a savings account, denoting a "piggy bank" saving mentality.

An attitude that favours gratification is a boon for many brands, which can still expect healthy levels of consumer spending on goods and services – at least at present. But the report's authors suggest that marketers be sensitive to consumer unease and consider carefully how a culture of short-termism might impact long-term prospects.

The research, which is part of OMD's Future of Britain initiative, is designed to offer insights into the "real Britain". It examines how Brits plan, spend, prioritise and save, and the ramifications of their behaviour for brands.

Laura Fenton, OMD UK's managing director, said: "The concerns around our level of financial literacy should be taken seriously and there are opportunities for advertisers to become educators and assist consumers through their financial journeys."

Mark Barry, News UK's agency development partner, added: "With the research revealing that only 21% of parents actively engage with their children on financial subjects – such as saving, debt and borrowing – there is certainly a bigger role that parents and peers can play to educate them better.

"However, it’s also important for brands to understand the role they play, offering value at the right moments. Context is important when it comes to driving education around finance and news brands deliver the trusted environment that can help brands to really flourish."

The partnership is the first of its type for OMD and News UK. The report was compiled on the basis of quantitative research conducted among 2,700 UK adults, across a demographically representative sample. Qualitative research was conducted among focus groups in the West Midlands and London, as well as via OMD UK's YourVoice research community.

A full version of the report is available here.

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