It is widely recognised that personal finance problems are on the increase in the UK. In 2005 personal debt levels in the UK broke through the trillion pound barrier* for the first time and long-term savings continue to be seen as an alien concept by 65 per cent of UK adults*. More than eight in ten of those saving for retirement, some 16.7 million people, expected a pension shortfall*.
We wanted to bring a fresh approach to understanding how we can help overcome these issues. AXA Avenue involved 20 households from a Brighton community. Half of them were given access to an independent financial adviser (IFA) for a year while the other half were left to their own devices.
Over the twelve months our IFA took the participants through three key financial planning stages: managing debt, short-medium term savings, retirement planning and in some instances investment management. We also carried out regular comparisons to see how the two sets of households were managing financially. At the same time we commissioned national research to discover trends among British consumers which were then contrasted with the study's findings.
The results have been amazing. The households who had access to financial advice, on average:
- were £5,000 better off than those without
- increased their savings by over 40%
- reduced their debt burden by 22%
- increased their net wealth by nearly 5%
All in just 12 months.
You can learn more about the AXA Avenue experiment including details on the residents and the advice they received from the IFA at www.axa.co.uk/avenue
* Credit Action, August 2005
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