People & Money 2020

People &
Money 2020

The BlackRock People & Money report is the world’s largest study on the relationship between wealth and well-being . As the world changes, so does the way people think about money. That’s why we travelled the globe to talk to people about this complicated relationship, because the more we listen, the better we can act. It’s important to note that this survey was conducted before the COVID-19 pandemic, so some of the responses may have changed during that time.

In the UK, this is our story.

This survey* was fielded between November 2019 and January 2020, with 26,814 respondents in 18 nations, of which 4,013 came from the UK. We note throughout where the COVID-19 crisis has exacerbated the trends or reinforced the insights into people’s relationship with money.

What we heard

What we heard
76% want their investments to make a positive impact.
What we heard
52% don’t feel confident making investment decisions.
What we heard
49% want a tech/human balance in investment support.
What we heard
35% don’t believe they’re on the right savings path.
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Sustainability gets the green light

The opportunity for sustainable investing is clear, for both investors and non-investors.
76% of investors we spoke to, in the UK, overwhelmingly feel it’s important their investments make a positive impact.

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Almost 1 in 4 investors said increased ESG allocations would encourage them to contribute more to their retirement plans.

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1 in 3 non-investors said sustainable options would encourage them to invest for the first time.

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The COVID-19 crisis has triggered a reassessment of the way we live our lives in terms of our health, our finances, and everyday activity. For investors, this has resulted in identifying resilient sources of return as they increasingly seek to build portfolios that match their sustainable investing goals. Our recent research has demonstrated that sustainability has fared well during this period of volatility, from both a performance and demand perspective, and we see this being a long-term trend.

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Sarah Melvin Head of BlackRock's UK Business

Spread the word

To grow sustainable investing, we must grow familiarity. This would be in everyone’s interest: 65% of people who know little or nothing about sustainable investing said it appeals to them.

Spread the word

• 9% Brits say they’re familiar with the term, and this was consistent across age groups.
• Only 48% who currently invest have heard the term.
• 66% have never heard the term.

A world of myths

Lack of knowledge leads to misconceptions. A large number of people, in the UK, think sustainable investing translates to higher costs (48%), higher risk (45%), and sacrificing returns (47%). However, 45% of those surveyed said they would pay an additional fee for sustainable investments.

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People are also unaware of how sustainability is measured (73%). This is consistent across age groups, regions and investors vs. non-investors.

Resilience amid uncertainty

Brian Deese, Global Head of Sustainable Investing at BlackRock, discusses the strength of sustainable investing so far this year and its outlook for the rest of 2020.

The most important ESG issues

Environmental issues are the main concern, more specifically pollution and waste (61%) and climate change risk (57%).
84% of respondents are concerned about environmental issues. 55% of respondents are concerned about social issues. 35% of respondents are concerned with governance issues.

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Sustainability: The megatrend

We found that two thirds of Brits are interested in investing in key megatrends. Climate change is most appealing (36%), followed by technological advancement (15%).

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Removing old walls

Status quo and old financial systems are keeping new investors away. As an industry, we want to work to become more in tune with society. The more obstacles we remove, the more financial futures we can build.

The last taboo

People’s relationship with money is complicated. Money is something people still feel reluctant to discuss. We must help people to feel comfortable discussing their money issues by changing the narrative to be open, trusting and inclusive. It’s how we will bring financial well-being to more people.

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Is there too much cash on the side line?
“The industry is rightly concerned about highlighting the risks of investing but there is a balance to be struck. Holding cash for the long term is unlikely to meet your goals and allow you to retire one day.” —Joe Parkin
Joe Parkin

Cash vs. investments

We must change perceptions to change the balance.
• Cash makes people feel safe (44%), secure (42%), and in control (44%)
• People view investing as risky (42%) and feel as though it's only for the long term (19%)
• People primarily see investing as a way to grow wealth, ahead of other goals such as preserving wealth or retiring.

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Are we talking to ourselves?

How can we expect more people to trust investing if they can’t understand what we are talking about? It’s clearly not just a matter of knowing what to say, but how to say it.
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61% say investing information is difficult to understand.
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76% do not consider themselves investors.
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69% do not see themselves in advertisements from investing investment firms.
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Not for me
Less than half agree that “investing is for people like me.”

Technology gets a big thumbs up

People really see technology as an advantage when managing money. We found that more and more, investors are becoming reliant on it. They see access, convenience, clarity and cost efficiency as key benefits.

Ease of access
70% of Brits value the easy access that technology provides; being able to consolidate accounts in one place and access at any moment.
Reliable and transparent
36% of Brits value easy to navigate interfaces and language that is accessible and simple to understand (31%).
Less costly
29% of Brits expect technology to be cheaper than going to see a financial professional.

But humans still get a big thumbs up, too

When it comes to managing money, human expertise and interaction are still important. 49% of Brits said they prefer a balance between technology and humans, and 32% of investors recommend that non-investors make a first investment with a trusted adviser.

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So, technology is a great tool for the investor and advisor. It can provide a new level of transparency and trust between advisors and their clients and help build a stronger relationship.

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Whether using a human adviser or not, investor expectations around the use of technology have risen. They see access, convenience, transparency and cost efficiency as key benefits.

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Joe Parkin Head of Banks and Digital Channels in the UK at BlackRock

Thinking forward

We asked people what would have helped them feel better about past financial decisions. They mentioned more tech solutions:

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The realities of retiring

People's expectations for retirement are evolving. Their first priority is not running out of money, meaning retirement is no longer an idyllic, final destination, but more a modified working state.

Worried about the future

Even though many people have started saving, they don’t always feel confident or prepared.

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I have no plan
“I’m a millennial with a ton of student debt and expenses and I have absolutely no plan on retiring.” —Sarah H., non-investor
I have no plan

What we can do

The COVID-19 pandemic has illustrated just how important it is to have a financial plan for the future. The goal hasn’t changed: to protect people later in life. Though people know their retirement savings may not be their only income source in “retirement,” this shouldn’t stop people from contributing now.

What we can do

See how people have changed their story

Through 60 Second Docs Wealth, we capture real-life story changers. See how more people are achieving financial well-being.