UK adults demonstrating ‘financial caution’

Only seven per cent of people in the UK are willing to take a risk with their finances.

This is according to research by the Financial Services Com…

Only seven per cent of people in the UK are willing to take a risk with their finances.

This is according to research by the Financial Services Compensation Scheme (FSCS), which demonstrates how individuals are taking a responsible attitude to their money. This could be because of the economic downturn, which has left many people reluctant to spend cash they do not have.

Such is the scale of their worries that more people are willing to take a risk with their health (16 per cent) and their family (15 per cent) than their finances.

When it comes to specific financial products, individuals are demonstrating a similarly cautious approach, as only four per cent are prepared to be risky with their mortgage and seven per cent with their current account or savings.

On top of this, 75 per cent of respondents admitted the events of the last five years have had a bearing on how they approach financial decisions.

Mark Neale, chief executive of FSCS, said: "The run on Northern Rock over five years ago was a seminal moment for the British public. It has made people more cautious about their money and the risks to it they will accept.

"Given events, it is understandable that people are so risk-averse with their finances. Protection for savings and deposits has improved significantly since 2007 so there is no need for people to worry about any money they have with UK-authorised banks, building societies and credit unions."

People who have failed to demonstrate a cautious attitude may find their financial situation is not ideal. In this case, seeking out a debt solution could be the best way forward, as it offers them the chance to reduce their monthly repayments.

In most cases, creditors will recognise if individuals are making an effort to repay their debts and so they will freeze interest and charges, which should make it easier for people to become debt free.

By Joe White

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