When you consider how bias might affect your financial decisions, it’s often the harmful outcomes that come to mind. However, there are ways you can leverage certain biases, including framing bias, to your advantage.
Framing bias refers to the tendency for how information is presented to influence your perception or decisions.
For instance, if you read that 10% of a business’s customers are unsatisfied, you might assume it delivers poor service. However, if you switch this to say that 9 in 10 customers are satisfied, you’re more likely to have a positive view of the business.
The information presented is the same, but one option focuses on the positive, which may influence the decisions you make.
It’s a type of bias that could affect your financial decisions.
If you’re looking at an investment opportunity and see that it has a 10% chance of falling in value, this could trigger a fearful response. Even though there’s a greater chance that the value will remain the same or rise, the framing of the information means you’re more likely to focus on the risks. As a result, you may be tempted to place your money elsewhere, even if it’s an investment that fits your overall strategy.
On the other hand, if you read that an investment has a 90% chance of delivering returns, you may focus on how it could help you reach long-term financial goals.
3 practical ways you could reframe your financial decisions
1. Focus on long-term performance during market volatility
When investment markets are volatile, panic can set in. Rather than focusing on short-term falls in the value of your portfolio, you can reframe them more positively.
This may involve looking at long-term performance. Although the value of your assets might have dipped when compared to a month earlier, over your full investment horizon, you could still be in a strong position.
Alternatively, you could reframe market volatility as an opportunity. It’s a chance to buy stocks at a lower price and possibly benefit from the bounce-back.
Reframing investment volatility in this way could help you look at the bigger picture and avoid decisions based on fear.
2. Frame financial sacrifices as paying your future self
Securing the future you want often involves making financial sacrifices today. To enjoy a retirement that is filled with the things you love, you might need to reduce your disposable income to increase pension contributions.
Rather than looking at these decisions as a sacrifice, view them as a way of paying your future self. This mindset adjustment could make sticking to your long-term financial plan easier because you’re working towards a clear goal, though this may not be suitable for everyone.
Similarly, you can reframe essential spending.
For example, your monthly premiums for income protection or life insurance may seem like an added household expense with little immediate benefit. Reframing this outlay as a way to insure your future can help you focus on the benefits financial protection offers.
3. Review information from a positive perspective
People often avoid financial decisions or certain options because they’re worried about the outcome or believe they lack the knowledge they need.
A July 2025 poll conducted by YouGov found that just 1 in 3 Brits express a willingness to invest savings in stocks and shares outside of a pension. One of the key reasons for avoiding investing was that it’s “too risky”.
While investing does present some risks, the markets have historically delivered long-term returns and recovered from downturns. While investment returns cannot be guaranteed, people who avoid investing because of their worries could be missing a chance to increase their wealth and reach life goals.
For those who focus on potential losses, reframing the information to emphasise potential returns and what they could enable in your life might be helpful.
Of course, a positive outlook needs to be realistic and, when investing, it’s important to be aware of the risks. A financial planner can help you establish what investment risks are appropriate for your circumstances.
Get in touch
Working with a professional financial planner could help you assess your financial decisions and identify when bias might be influencing the outcome. We could help you frame information in a way that allows you to assess your options. Please get in touch if you’d like to arrange a meeting.
Please note: This blog is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only.
The value of your investments (and any income from them) can go down as well as up, and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available.
Tax treatment depends on individual circumstances and may change in the future.
