More than half of savers have no long-term financial goals and risk losing motivation, a Morningstar poll reveals.
The result of the online poll, designed to gauge consumers' attitudes towards financial planning issues in Financial Planning Week, has concerned advisers, who argue life planning and cash flow modelling are vital to help consumers save for the years ahead.
However, the poll also revealed almost 80% of respondents are not putting off saving until a later date.
Nick Cann, CEO of Institute of Financial Planning warns not enough is being done to set out long-term goals. "Life planning and Cash flow modelling are essential parts of the process," he says.
Furthermore, Dennis Hall, certified financial planner with Yellowtail Financial Planning is surprised the minority of respondents have established short-term goals.
"Well-articulated goals help bring the purpose of saving to life, and whilst short term goals are easier to picture, long term goals can be equally vivid and motivational."
Hall believes younger generations will need to take personal responsibility for their long-term financial security as government and employer support for retirement income diminishes.
The poll also found nearly three quarters of respondents claim to view their monthly pay cheque sensibly, but just over one quarter see it as an opportunity to "splurge rather than save," potentially causing long-term pain.
"If we all had a clear idea of how much our desired current and future lifestyle is likely to cost we would be able to make informed decisions about how much to save and when," says Alan Dick, certified financial planner with Forty Two Wealth Management.
However, almost two thirds of people say the economic crisis has made them want to understand more about investing, while 97% think they have a good idea of how to start a nest egg if they received £1,000.
"I suspect the landslide result, which suggests that most people would know how to invest for the long term, is more a reflection of lack of financial education," says Dick.
"The evidence of a very large savings gap in the UK suggests that people aren't as financially aware as they might think."
Dick suspects most peoples' long-term plans involve putting cash in a bank account, which while it is unlikely to fall in value, virtually guarantees they will lose money in real terms in the long-run.
Entry deadline: Friday 28 September 2018
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