Britons put themselves at long-term financial risk

Professor Ivo Vlaev from Warwick University claimed the UK was "in danger of creating a nation addicted to the quick-fix of instant gratification at the expense of important, basic long-term life goals, such as health, wellbeing and financial security."

The professor was commenting after a study carried out by digital wealth manager Moneyfarm revealed more than three-quarters of the UK population were "completely unprepared" for life after retirement.

According to the Moneyfarm Decodes Short-Termism report, 70 per cent of UK adults had "no plans" in place for retirement, 77 per cent admitted they did not think further ahead than five years, while 31 per cent said they did not plan more than six months in advance.

The study, carried out among more than 1,000 UK adults and with interviews from a panel of specialists in the fields of science, psychology and trend analysis, found there was a significant gender gap in terms of financial preparation.

They are sleepwalking their way into an uncertain financial future. Scott Gallacher

Some 39 per cent of women said they were not financially prepared, compared with just 26 per cent of men.

Moreover, one in five Britons said they had no long-term plans at all, whether healthwise, careerwise or financially.

According to the study, 63 per cent of adults agreed they 'live only for the moment' rather than planning for the future, despite 27 per cent of people stating they feel ‘powerless’ over the direction of their lives.

Age is also a contributory factor when it comes to money management. While one in four (39 per cent) of 18 and 24-year-olds said they did not feel financially set-up for later life, was the 35-44 year old group who said they feel least prepared for their future financial comfort. 

Scott Gallacher, director of Moneyfarm, said: "The majority of Britons are taking an extremely high risk approach to future planning.

"They are sleepwalking their way into an uncertain financial future, exhibiting very little proactivity when it comes to money matters in particular."

Quoted in the report was Jonathan Openshaw, trends forecaster, who said the fact there was so much choice and so little time meant many people did not know how to prioritise and operate in the most effective way.

He said: "With a surfeit of choice comes a paralysis of action. Because you have so much information, it is hard to know how to act effectively."

Things cited by individuals as reasons why they have failed to plan included everyday responsibilities, at 42 per cent, a tendency to spend now, rather than save (22 per cent) and distraction, at 17 per cent.

simoney.kyriakou@ft.com