interactive investor comments on Talk Money Week 2022

Young people are more confident talking about money, interactive investor research shows, but progress still needs to be made in breaking traditional taboo around finances.

Coinciding with Talk Money Week this week (7 November onwards), interactive investor, the UK’s second-largest direct to consumer investment platform, outlines how the nation is talking about money and where more progress can be made.

Many of us still struggle to talk about money, but these conversations have perhaps never been so prevalent given the current cost-of-living crisis and biting inflation, which is eroding consumer confidence and causing a huge amount of financial concern for many.

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interactive investor’s recent 2022 Great British Retirement Survey showed that when it comes to finances generally, many people seldom talk to a partner about money. Of people in a relationship, 47% of ii’s general population* sample told ii they discuss finances only occasionally; 36% at least a few times a week; and 17% rarely or never.

Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “Money really is at the tip of our tongues given the challenges consumers are grappling with at the moment, yet it is clear we still have more work to do before it becomes less of a sensitive or embarrassing subject.

“The challenging financial environment we are in is a key opportunity to promote honest conversations with peers and family about money. This can be especially important for those struggling; after all, rather than shy away from their money woes, being vocal could prove vital in getting the support they need. Energy bills, for example, are a key concern for many UK consumers at this worrying financial time, and just speaking to your energy suppliers may offer more of a pathway to manage these payments. Speaking openly to family and friends about money can help build financial confidence – and particularly during tough times such as these – this can prove vital.”

Victoria Scholar, Head of Investment, interactive investor, adds: “Consumer confidence in the UK has been waning, and this is unsurprising with wages struggling to outpace inflation, soaring mortgage costs, a painful increase in the price of essential goods, especially food, and fears about the implications of a looming recession. Although consumer confidence picked up slightly in October (rising to -47 from -49 in September) the figure is still languishing near September’s record low of -49. Time will tell whether this trend will continue into the new year, especially with a new government budget on the way this month.”

Where progress is being made: young people lead the way in breaking traditional money taboos

The good news is that younger people are breaking the taboos about money conversations, particularly when it comes to talking about money in their relationships. Some are even having regular discussions about their finances.

In the same ii research, 44% of those aged 40 and under (from the general population sample*) told ii that they discuss finances at least once a week.

When we talk a look at young couples, there has been even more progress, with 44% of couples in their 20s and 30s stating that they discuss finances at least once a week, whereas only 32% of over-40s do.

However, 17% of couples surveyed (general population sample) said they rarely or never talk about money.

Lifting the lid on the dreaded ‘P’ word

The ‘P’ word, pensions, has a glaring engagement gap, and so it is perhaps no surprise there are still many people in the UK who are not discussing them. This engagement gap was also highlighted in ii’s 2022 Show Me My Money Report.

In ii’s Great British Retirement Survey, it was clear that a significant number of people know worryingly little about pensions, even though we are 10 years on from auto-enrolment being introduced. Of the respondents in ii’s Great British Retirement Survey - nearly one in four (24%) of the general population told us they know ‘nothing’ about pensions. The proportion is even greater in lower-income households (32%) and higher for women (29%) than for men (18%).

However, of those who did have information, speaking to others has clearly been influential. For example, 32% of this sample said they are most influenced by parents (16%), friends (12%) or partners (12%).

Household income plays a role

Of the general population sample in the same ii research, nearly half (47%) told ii they talk openly with family about retirement and savings.

However - this varies by household income and is higher in better-off families (62%) and lower where incomes are smaller (40%).

ii customers are more openly discussing saving habits

Two thirds (67%) of the interactive investor community sample told us they talk openly with family about saving. About a third of the population sample (34%) talk openly with friends about pension issues.

Again, this is higher in families with more income (45%) but also among younger people (43%). Interestingly, these respondents are also more likely to feel there is a connection between how openly finances are discussed with family and a person’s own individual retirement savings.

Good money habits start at home

Passing on knowledge can be just as effective as passing on wealth. As well as more robust financial education in schools, a key longstanding campaign area for ii, ii continually advocates for greater discussions about money within families.

In November 2021, interactive investor, launched Friends and Family. For just £5 extra a month, ii customers can now each gift up to five peoplea free subscription to ii. This initiative, opened up ii’s great value service to those with smaller sums of money to invest, but crucially it also arguably creates an excuse for families to talk informally about their finances and goals with those they care about.

This mantra of ‘good money habits start at home’ is also a key driver of one of ii’s flagship podcasts – the ii Family Money Show, hosted by leading UK broadcaster Gabby Logan, where each week a famous face speaks to Gabby about their families’ finances and how they promote good, lasting, attitudes towards money. The hope is this also helps inspire people to have similar conversations with their own families.

*The Great British Retirement Survey sample:
In all, we have surveyed 10,000 people, using the award-winning, strategic insight consultancy Opinium Research between 26 May and 29 July 2022. Half our responses came from Opinium’s nationally representative sample: 5,230 UK adults 22+. The research was weighted to be nationally representative, on age, gender and education status, region, employment status and ethnicity. The other 5,000 responses came from our own interactive investor community, and we have reported the findings separately, with some interesting comparisons.