While money savvy Brits quickly navigate the complexities of personal finance, others are getting uncompetitive or inappropriate products due to a lack of basic understanding.
Research conducted by online investment manager Nutmeg in UK consumers has revealed a shocking grasp of financial products and jargon, across a range of essential products.
Almost 50% of Brits don't know what ISA (Individual Savings Account) stands, and 60% have no idea how much they can invest in an ISA (tax-free) every year.
Despite being at a record low, 50% of people are clueless to the current Bank of England base rate of interest, and almost 40% are unaware that Tracker Mortgages rise and fall with the BoE base rate.
Given their struggles with basic financial information, it is no surprise that more complicated financial jargon like ‘asset management’, ‘equities’ and ‘offshoring’ leaves most Brits completely baffled.
Katie Prentke English, Commercial Director at Nutmeg, said, “Millions of people are not benefitting from key products and opportunities because they are uninformed about basic financial terms."
Unfortunately, the "experts" aren't helping either, with almost three-quarters of people feeling bamboozled when talking to financial experts. This lack of understanding means 40% of Brits never change the banking products and financial services they use.
Katie Prentke English, from Nutmeg, added: “This study clearly illustrates the need for the industry as a whole to make financial products and services more accessible to everyone."