Does the UK have a financial confidence problem?

Lowell's new research shows a third of Brits aren't confident about their finances. Find out the most confusing financial terms that Brits aren't sure about.

At Lowell, we understand that sometimes the world of finance can feel confusing. Unlike other areas of life, it's not taught as standard in school, and there's lots of financial jargon that makes things tricky to understand, which is why we always try to keep it simple.

In fact, new research conducted by Lowell has revealed that a third of Brits don't feel confident when handling their finances[1]. Our research also revealed some of the most easily-confused financial terms, and some of the surprising places where people go for financial advice.

We know that financial terms can feel confusing sometimes. Our new research shows that lots of people lack confidence in understanding personal finance, whether it’s because of complicated jargon or not being taught about money at a young age.

That’s why at Lowell we’re passionate about helping to educate both our customers and the British public, to make financial matters fairer and more transparent for all.

The financial terms that are most likely to confuse people

When it comes to finance and money matters, there are lots of terms to understand, and this can be confusing. In fact, many Brits don’t know the meaning of common financial terms like overdraft (45% of people) or arrears (52%).

A lot of Brits are unsure when it comes to terms relating to debt. For example, 49% of people don’t know the meaning of ‘credit score’. At Lowell, we’re passionate about helping people to understand the world of finance, as part of our mission to make credit clearer and easier for everyone. To help clear up some of the misunderstandings about credit scores, we recently did some research into common credit score myths. If you need some more help understanding your credit score, check out our blog on how to improve your credit score.

One of the other terms that people weren't confident about was CCJs, or County Court Judgements. 64% of Brits don't know or understand what a CCJ is. If you're in debt, a CCJ can have a big impact on your finances, so it's important to understand what it is. For more information about CCJs and how they could affect you, check out our CCJ guide. For more other helpful resources on understanding financial words and terms, check out some jargon-busting guides, such as this guide from Age UK.

Being taught about finances at schools could help prevent financial issues later in life

One of the things we asked people in our research was about their financial education. A huge 84% of the people we surveyed said that learning more about finances at school would have helped them.

For lots of people, money matters aren’t taught in school as standard, which could be why Brits aren’t confident in financial terms. At Lowell, we believe in helping to educate our customers and the British public. We want to make financial advice more accessible and help remove the stigma around debt.

The places people get financial advice from instead

Perhaps because lots of Brits aren’t taught about money at school, people get financial advice from other sources instead. When looking for financial advice, over a third (36%) of Brits say they would go to their bank, whilst 35% would see a financial advisor. However, a quarter (27%) rely on family and friends for advice.

Young people, in particular, are more likely to get financial advice from unusual sources, as 20% of young people would get money and finance advice from social media. This could be because young people are more likely to feel nervous about financial matters – our research revealed that 44% of young people also wouldn’t say that they were confident with their finances.

If you don't feel confident about your personal finances, or you're worried about not understanding financial terms, Lowell are here to help. We've put together plenty of useful, easy-to-understand guides at the Lowell debt hub and in the Lowell blog to help build your financial confidence.

[1] Survey conducted by Censuswide on behalf of Lowell, 04/05/21 - 07/05/21. 1,001 general respondents in the UK

Published by Libby Davies on 20th May 2021