There is no panacea to financial struggles of the many

Mouthy Money editor Edmund Greaves considers the findings of the latest Money Matters Index report – and whether closing the financial advice ‘gap’ might help people feel better off.

The findings of the latest Money Matters Index make for yet another set of fascinating insights into the financial health of the UK.

Our latest Money Matters Index has looked to do a deep dive into the popular understanding of wealth and how it measures in 2024.

One of the most enlightening stats to come out of the report was how much people think it takes to be considered ‘rich’ in 2024. Those figures are just under £87,000 income or £1.04 million in assets.

Clearly there stands a significant gap between what the average respondent sees as ‘wealth’ and the average person’s financial lot. Of course this will always be a moving target: the better off we become, the higher the perceived threshold for what wealth is.

But what about the path to getting there? This is where to me the latest research throws up some interesting challenges.

Less than one third of respondents are content with their financial situation. This speaks to the overwhelming desire for most of us to look to improve our personal financial picture – no bad thing.

But how do you go about getting there? Closing the financial advice gap might be a good start.

Setting aside the here and now, one of the most intriguing findings is how confident people are about making financial plans for the future. Just two in five are confident in making plans and one in four don’t think they can at all.

This lack of ability to make financial plans firstly throws into sharp relief the detrimental effects of inflation on personal budgets, but it also exposes a more fundamental issue at the moment with regards to the provision of financial advice.

The so-called ‘advice gap’ is well reported and known, to the point that the regulator is now looking at the advice/guidance boundary and considering how to address this in light of Consumer Duty.

The simple fact at the moment is that much of the financial services industry is geared toward those two in five who have the headspace and financial means to think about and make a plan. The rest are left-behinds with nothing more than some online resources, personal finance pages, and their own ingenuity, to come up with a long-term plan for their wealth.

So while wealth is relative, and the threshold will rise as one’s salary or portfolio increases in size, the tools to attain that wealth are as of yet simply not there for enough people to make a difference to their long-term prospects.

Whether wealth management and the financial advice sector have to be cajoled to do something, only time will tell. But one suspects we are at a turning point. 

Find out more about the latest Money Matters Index report produced in partnership with MRM here.