Over half of Britons 'ignore their finances

Most people bury their heads in the sand when it comes to their finances, and lack the knowledge and confidence to make decisions, according to research published today.

About 52% of the population are "head buriers" who are not interested in their finances, often have inadequate savings and tend to gravitate towards financial firms whose brands they recognised, according to Mori Market Dynamics.

But the research claimed that by 2008 this group is expected to have fallen slightly to 47%, as people are encouraged to take a greater interest in their finances by the media, government and industry.

At the same time the number of financial connoisseurs, who take an active interest in their money, shop around for products and base their decisions on interest rates and past performance rather than brands, looks set to increase from 13% of adults to 16%.

Mori Market Dynamics also expects the number of people who aspire to a greater level of financial knowledge to increase from about 21% in 2003 to 24% by 2008. But the number of people who take a laissez-faire approach, lack interest in financial services and stick to brands they trust, looks set to remain broadly unchanged at 13% compared with 14% now.

Jon Francis, of Mori Market Dynamics, said: "It is encouraging that people will be more savvy with their money by 2008, but clearly there is a long way to go and we believe the industry and government have to do more to help change the 'head burier' culture, currently so prevalent across the UK."

The group expects the market for unsecured lending to soar by 44% between the end of 2003 and 2008 to be worth more than ?303bn, of which credit card lending will account for ?195bn. But the mortgage market looks set to stagnate in 2004 and 2005, and will grow only slightly in 2006 and 2007, before slowing down again the following year. Overall the group expects the market to be worth ?293bn by 2008, which represents growth of just 6% once inflation has been stripped out.

The market for saving through deposit accounts, Isas and stock market-linked unit trusts looks set to rise by 65% to ?205bn.

The research was based on data from 50,000 consumers and figures from the Association of British Insurers, the Bank of England, Council of Mortgage Lenders, Department of Trade and Industry, Financial Services Authority and Treasury.