The advice gap

2021

In partnership with:

Welcome to the 2021 edition of OpenMoney’s UK Advice Gap Report, the third year we have run this study.

The report combines research among 2,000 British adults with our own experience of speaking to customers every day, to give us an insight into the financial lives of people of all ages and levels of wealth. It highlights the real issues presented by the advice gap in the UK and the importance of the finance industry and policy makers working together to increase the availability, and accessibility, of regulated financial advice.

At OpenMoney, we believe that financial advice is for everyone. Millions of people are missing out on the positive impact regulated financial advice can have on their financial wellbeing, helping them keep on track and achieve their goals.

Is the advice gap closing?

Our research tells us that fewer people than ever are taking paid financial advice. One in fourteen people (7%) has paid for advice in the last two years, compared to one in ten in last year’s research.

OpenMoney Advice Gap 2021

And we calculate that 20 million  people in Britain feel they would benefit from free advice but are unaware of, or unable to access free services. This has come down very slightly from 20.8 million last year, possibly because the impact of the pandemic has forced people to seek help with their money, but it remains far too high.

We also found that an estimated 6 million people  in Britain (roughly the combined population of Birmingham, Manchester and Sheffield) want advice but think it costs too much. This has increased from 5.3 million in 2020.

Young people more willing to pay for advice

While the advice gap hasn’t gone away, there is some hope for the future. Although only 12% of those who have not paid for advice in the last two years say they are likely to do so at some point, this increases to a fifth (21%) of people aged 18 to 24.

OpenMoney Advice Gap 2021

The same age group was also less sensitive to price, with 11% of 18- to 24-year-olds saying that advice would need to cost less for them to consider it, compared to 17% of all respondents. This is a big drop from last years’ research, where 25% of 18- to 24-year-olds were concerned about the cost of advice. It suggests there is a growing awareness among younger people that good quality, regulated advice is worth taking, possibly because sadly this age group has been worst affected financially by the pandemic and is now most in need of help.

… but are at risk of being influenced by unqualified social media ‘experts’

However, there is still work to be done. Worryingly the under 25s are more likely to turn to social media for financial advice than pay a professional adviser. Almost one in ten (9%) of respondents in the 18-to 24-year age group say they use social media such as TikTok and Instagram for financial advice, compared to just 3% who have paid for professional advice across all age groups.

It’s incredibly easy to be influenced – often without realising – by self-proclaimed experts. There is a job to be done by all in the advice industry to raise awareness of not only regulated financial advice, but also the risks that come with listening to those who aren’t qualified.

We’re determined to bring about positive change in the financial industry and will keep campaigning to make things simpler, clearer and safer so that people can be confident they are making the best decisions for their financial futures.

Click download to access our full finance gap report and read more on how the advice gap as evolved both over the last 12 months and since the original advice gap research conducted by Citizens Advice in 2015, and what factors have influenced it.

[1] 39% of respondents strongly agree / tend to agree with the statement: I would benefit from free access to money advice to help me with managing my money and making financial decisions.

[2] 72% of respondents haven’t paid for financial advice inthe past two years. Of those, 74% are unlikely to pay in the future. Of those, 17% said to pay for it in future, financial advice would need to cost less.

[3] All population calculations are by OpenMoney based on 12% of the GB adult population estimate of 51,435642.

Download the report

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