Reducing unhelpful noise around finance

“Downturn has wiped one-fifth off retirement funds” perhaps, or “UK stocks plummet in worst day of trading since the beginning of the pandemic.” Both of these are actual headlines (not from The Scotsman I hasten to add). The first from the financial crisis of 2008, and the second from earlier this year as concerns swirled about tariffs and trade wars.

Budgets, the time when politics and your finances collide, also take up a lot of airtime. We now have the headlines that dictate where Westminster wants to direct people’s money, and who will be paying for it.

This year especially, speculation has been rife about where the Budget will take us. Yet, as fiscal experts continue to comb through Rachel Reeves’ small print, it’s worth reflecting on the damage this “noise” around investing and saving for the future can do, especially when action is taken before the facts are known.

The important thing to say upfront is it can be really hard to “stay the course”, “keep your head” or any of the other clichés that get trotted out in the wake of scary financial news.

The example headlines quoted seem designed to induce panic, so it’s not really surprising if people end up, well, panicking.

It’s something we at The Lang Cat have looked into as part of research carried out on behalf of investment firm Royal London.

The Meaning of Value report looks at how people define value, from the perspective of both the public and financial advisers. As part of this, we asked UK adults how they felt about some of the more “noisy” aspects of their finances. Specifically, we wanted to know how aware they were about the media speculation ahead of this week’s Budget.

Just over half said they were aware about potential changes to tax, pensions and ISAs, with men more likely to be aware than women.

But the research also underlined the crucial role financial advisers play in helping people to cut through the noise.

Providing reassurance is a key part of the service, and financial advisers care deeply about their clients. So how do they make sure clients are informed without adding to the panic? What if rumoured tax changes turn out to be true? These are the kinds of questions financial advisers are wrestling with on your behalf.

From the consumers we heard from, 47 per cent said they will only act if/when the facts are known. This falls to 42 per cent of consumers who work with a financial adviser, suggesting these conversations are either helping people to avoid making knee-jerk decisions that affect their money, or helping people to act if it is right for them and their circumstances.

The good news is that despite all the negative headlines, whether it’s the Budget or something else, with the help of an advice professional people are finding a way to reduce the volume of the noise, even if they can’t quite turn it off completely.