Welcome to the third Annual Wealth and Protection Survey from Drewberry™. We’ve upped the number of participants to 3,000 people (compared with 2,000 previously) to make the results more robust than ever.
The data below covers areas including UK household wealth and assets, the state of the nation’s pension and retirement provisions, the public’s opinions on financial advice, the financial products they hold and what they think about inheritance tax.
Drewberry’s Wealth & Protection Survey 2017 covered a representative sample of 3,000 workers in the UK, factoring in age, employment status and gender to get the best possible sample.
We think the results make compelling reading and, in some areas, it’s clear we’ve unearthed some sizeable issues with the UK’s personal finances.
The findings include that a worrying proportion of people are simply not prepared to retire and probably won’t face the retirement they deserve based on their current pensions. Also, Britons are more likely to insure their pets than their own incomes – both worrying trends.
Much of this comes down to the fact that Britons are most likely to describe themselves as ‘just about managing’ – there’s little spare capacity for anything else given 44.3% of people have £200 a month or less in discretionary income.
The public could benefit from engaging better with financial advice – 64.8% of people had never taken financial advice and a whopping 86.8% of people who said they wanted to pass on assets had never formally assessed their inheritance tax liability.
Overall, a better knowledge of the financial options available would likely benefit all.
The vast majority of the people we surveyed were working full-time.
2 in 5 UK workers said they were ‘just about managing’, while more than 1 in 10 said they were ‘hanging by a thread’.
Despite the economic circumstances, more than 3 in 5 workers had received a pay rise within the past 2 years.
Almost 75% of UK workers we surveyed were basic rate taxpayers (earning less than £45,000 per year), while 17.6% were beneath the income tax threshold of £11,500.
44.3% of people had £200 or less left each month after meeting the cost of necessities.
16.4% of the population is walking around with more than £10,000 in personal debt.
2 in 5 adults said they had £1,000 or less in cash savings – far below what would likely be needed to sustain them if an accident or sickness stopped them working. For these people, Income Protection could be hugely beneficial.
40.1% of Britons had absolutely no investments in the financial markets outside of their pension, even though ultra-low interest rates have slashed returns on cash.
Almost 2 in 5 people in the UK are renting or living with their parents.
More than 1 in 3 renters in the UK say their rent eats up over 41% of their take-home pay.
39.6% of people with a mortgage said that their mortgage ate up no more than 20% of their income – only 22.8% of renters said their rent ate up the same small proportion of their income.
12.5% of people owned property worth more than £400,000 – well over a single person’s inheritance tax nil-rate band of £325,000. They’d possibly face an inheritance tax liability on their home unless they can use the main residence nil-rate band.
1 in 4 people don’t know how much equity they have in their homes – this can be essential information for those considering equity release to fund retirement, or those hoping to unlock equity in their homes to pay for long-term care.
If they couldn’t work tomorrow, 1 in 4 Brits would still be on the hook to repay a mortgage of at least £100,000. This is where Mortgage Protection Insurance can step in.
A higher proportion of respondents have pet insurance (23.7%) than the percentage of people who had Critical Illness Cover and Income Protection Insurance combined. Almost four times as many people were insuring their pets than were insuring their incomes.
Almost 2 in 3 people had never received financial advice, despite a wide body of research indicating it can make you better off by as much as 50%.
63% of people who’d had financial advice felt better off as a result.
People would most prefer to pay for financial advice via a set charge for a set piece of work.
44.4% of people mistakenly thought ISAs attracted tax relief on contributions (they only attract tax relief on capital/investment growth). Meanwhile, 66.1% of people were unaware pensions attracted tax relief on money paid in. Our Pension Tax Relief Calculator shows the tax rebate on pension contributions you may receive.
Almost 1 in 5 people said they didn’t have a pension at all. Meanwhile, excluding those who had started a pension but didn’t remember when, more than 1 in 10 had waited until the age of 36+ to start theirs.
1 in 10 people thought they’d never be able to afford to retire, while more than 1 in 10 expected to be over 70 before they could afford to stop working. Pension advice can improve retirement prospects.
More than 50% of people had no idea how much their pension was worth, while 21.9% of people had a pension worth £10,000 or less.
Over one third of self-employed people said they simply couldn’t afford to contribute to a pension, while more than 1 in 5 said they just hadn’t got round to it yet.
46.5% of people felt they’d be worse off than their parents in retirement, while only 25.4% felt they’d be better off.
1 in 10 people weren’t contributing anything to a pension each month, while more than 1 in 3 are contributing less than 5% of their income. This may not be enough – our Pension Calculator can forecast how much your pension could be worth based on your current contributions.
39.1% of people said it would be nice to be able to leave something for their children to inherit, but that it wasn’t a major priority for them.
More than 4 in 5 Brits who indicated that they’d like to leave something to their heirs had done nothing to assess their inheritance tax liability. Get started on assessing your inheritance tax liability with our Inheritance Tax Calculator.
Excluding people who weren’t sure what they might inherit, almost 1 in 3 people weren’t expecting to receive anything in inheritance from older relatives.
Only 8.4% of Brits knew pensions were free from inheritance tax, similar to the 8.1% of people who incorrectly thought you didn’t have to pay inheritance tax on your home (although with the new main residence nil-rate band, a proportion of your home may now be free from inheritance tax).
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