Almost a fifth (18 per cent) of UK adults do not have or cannot identify a long-term financial goal, new research from Scottish Friendly has found.

Nearly one in five people surveyed told the mutual they did not know what they wanted their finances to achieve over the next five years or more, according to its latest Family Finance Tracker research.
The proportion rises to nearly one in three among lower earners, with 30 per cent of adults with household incomes of up to £25,000 having no clear financial priority for the future.

This falls to 18 per cent among those earning between £25,000 and £50,000, 7 per cent among households earning between £50,000 and £75,000, and just 5 per cent among those with incomes above £75,000.

While its findings suggest that the capacity to look beyond everyday outgoings is closely linked to household income, Scottish Friendly says thinking ahead remains important at every income level – even where there is limited scope to put money aside.

The mutual’s research also shows how people’s focus on the future changes as families move through different stages of life.

Almost all parents of very young children have identified a longer-term financial priority, including 96 per cent of those with children aged one to four, and 94 per cent of parents with children aged five to 10.

That proportion dips to 91 per cent among parents of children aged 11 to 15 and falls further to 86 per cent among those with children aged 16 or 17.

It declines further once children reach adulthood, to 76 per cent among parents whose adult children still live at home and 74 per cent among those whose children have left home.

The findings come as Scottish Friendly calls for greater focus on helping people build the confidence and sense of purpose needed to engage with long-term saving and investing.

Kevin Brown

It is concerning that nearly one in five people has no clear idea of what they want their finances to achieve. It is hardly surprising, yet no less concerning, that this rises to almost one in three among those on lower incomes.”

Long-term direction is not only for those with substantial sums to save, since where budgets are tighter, being clear about future priorities can matter even more – even if immediate costs leave little room to act.

It is also noticeable that parents become less likely to identify a financial priority as their children grow older. That may reflect familiar goals changing as families move beyond education costs and support into adulthood.

Although there is no single right objective, and priorities will evolve, having a sense of what money should support over time can give greater purpose to decisions made today.

That is why Scottish Friendly believes more must be done to help people build the confidence, understanding and sense of purpose needed to engage with long-term saving and investing – whatever their income or stage of family life.