In the last decade, social media usage has skyrocketed across the world. Figures from Statista show that the UK was home to 57.1 million active social media users in January 2023 – that’s an incredible 84.4% of the population.
While the likes of Facebook and Twitter have been around for years, newer entrants like TikTok have attracted millions of monthly users, while the new Meta app Threads saw a staggering 100 million sign-ups in just five days after launch.
Looking for financial advice or products might not be the first thing you think of when you open your social media app of choice. However, new research has revealed that the likes of Facebook and TikTok are having an influence on the world of finance.
Read on to find out more.
1 in 10 people who bought life insurance did so as they heard about it on social media
A new study reported by Insurance Business reveals that nearly 1 in 10 people who have bought personal life insurance did so because they heard about it on social media.
Perhaps unsurprisingly, it is the 18 to 24-year-old age group most likely to be “influenced” – the study found that around 16% of that age group had taken out a policy because they heard about it from a social media influencer.
A similar number of 25 to 34-year-olds came to choose their policy the same way (17%).
While the impact of social media is growing, it’s worth remembering that individuals are still more likely to find out about the need for personal protection from more traditional means.
The most common way people hear about an insurance policy is through a financial professional – around 36%. Friends and family were the second most likely place to hear about life insurance, while comparison websites like I’m Insured came in third.
Kevin Pratt, life insurance expert at the company who commissioned the research said: “Contemplating the aftermath of your death on those you leave behind is hardly a cheery subject to consider. This makes it all the more interesting that some insurers are able to leverage social media to reach a younger audience, even if those numbers are relatively low at the moment.”
Most people take out life insurance to be “cautious”
The study also looked into the reasons why people take out life insurance in the first place.
It found that the most common reason – for around 2 in 5 people (38%) – was that, while they do not expect anything to happen to them, they are being cautious.
Meanwhile, 30% take out cover when they become parents, and 21% put protection in place when they took out their mortgage.
Other events that might prompt you to take out personal protection might include:
- Co-habiting with a partner
- Getting married or entering into a civil partnership
- Taking out debt that you’d like repaid if anything happened to you
- To cover a potential Inheritance Tax (IHT) bill
- Moving jobs and losing the protection you had through your employer.
Starting at around just £6 a month, life insurance can provide you with the peace of mind that your loved ones would receive financial support if you passed away prematurely.
Your beneficiaries can use the payout to:
- Repay your mortgage or other debts
- Replace your income
- Maintain their standard of living
- Meet regular commitments such as rent or bills
- Pay for your funeral.
We can help you to find the life cover you need at the best price. Get a life insurance quote now to see how much you could save.
Be careful when using social media
In recent years, more and more people have turned to social media for help with their finances.
Financial influencers, sometimes called “finfluencers” share online content teaching you how to manage your money. This content is particularly popular on TikTok, but it's not just younger people that are seeking out advice.
Good Housekeeping report that 1 in 5 people between the ages of 45 and 54 are more likely to get financial information from social media since the cost of living crisis began.
While there are plenty of people out there providing useful information about issues such as life insurance, saving, and investing, it’s important to be careful who you trust.
Here are three reasons why.
Social media finfluencers may not be regulated
When you work with a reputable firm – like an experienced online comparison site or a financial adviser – you have the reassurance that they are officially regulated. For example, I’m Insured is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Conduct Authority Register.
This gives you the peace of mind of knowing that the firm will be held accountable if they are not acting in your best interests.
However, when you take advice on social media, you will likely not have this protection. Anybody can create a TikTok, Instagram, or Facebook profile and start giving financial “advice”. While the FCA is working on tackling this issue, it is down to the social media platforms themselves to regulate misinformation, and this is notoriously difficult.
What it means is that the video you watch could be made by someone unregulated, and with very little knowledge of the financial world. They are unlikely to have taken financial exams to be able to practice, and you will likely have no recourse if the advice leaves you out of pocket or with the wrong product.
Working with a regulated, trusted provider ensures you benefit from this regulatory protection.
The finfluencer doesn’t know anything about your own circumstances
Life insurance, and other financial products, are designed to help you achieve certain goals, or solve certain problems.
A financial influencer doesn’t know anything about your personal situation. They have no idea what your life goals and ambitions are, your income and outgoings, your family, or the financial arrangements you already have in place.
It means that any advice they provide is likely to be extremely broad, and not tailored specifically to your current and future needs.
Social media is full of scams
Sadly, social media is also home to scammers and criminals looking to defraud you.
Indeed, Wales Online reports that 23% of Brits say they have lost money after taking personal financial advice from social media. The average loss was £368.56 per person.
Before you follow any advice you see on social media, consider:
- Doing your own research. Check out the credentials of the finfluencer you are trusting
- Verify any advice they give with an official source of financial advice – either with a FCA-regulated business or using safe online sources such as the government or Money Helper websites
- Speaking to friends and family to benefit from a personal recommendation.
Action Fraud report that victims lost a total of £63 million to social media investment scams in 2021. Always be careful before accepting any advice you see on Facebook, Instagram, Twitter, or TikTok.
We can help you find the life insurance you need
We’re regulated by the Financial Conduct Authority and so can help you to find the life insurance you need.
Simply input your details online, and we’ll compare the cost of cover from dozens of the UK’s leading insurers so you don’t pay any more than you need to for the protection that you want.
Or, contact one of our experts to find out more.