Friday, June 14, 2024

Brits have ‘little or no understanding’ of their financial position

Brits have little or no understanding of their financial position, according to new research.

A study of 2,000 adults found 58 per cent aren’t sure about their hourly rate of pay, while 70 per cent can’t say exactly how much they pay in income tax. In addition, two thirds of people can’t say accurately how much is in their bank account, while 64 per cent aren’t sure of the precise amount they owe on their credit cards.

But financial ignorance is bliss, accordingly. Almost a third of the respondents said life is too short to worry about money and 62 per cent expressed no intention to try and get a better grip on their finances in the near future.

A spokeswoman for Newcastle Building Society, which commissioned the study of 2,000 adults said: “Our researchers discovered that in the first instance, most people – eight in 10 – think they have a good understanding of their current financial position.

“But when you dig deeper and ask those same people about the detail around their financial affairs, from what they earn to what they pay on things like mortgages, rent, and other bills, they’re less certain. Pensions is an area that baffles many. Forty per cent of those who have a pension aren’t clear on how much they pay in, or even that there are tax benefits to doing so.”

Only half of those polled only have a rough idea of how many bills are coming in and what they pay on them, and only 45 per cent of people were able to say how much they spend on the mortgage or rent each month down to the last penny or pound.

When it comes to spending habits, the average adult finds it hard to track their spending day to day. Indeed, researchers found that when conducting the weekly food shop, either online or in store, less than half keep a close eye on what they are spending.

The spokeswoman for Newcastle Building Society continues: “For most of us, money is hard earned, so being prepared to put time into personal financial planning is a worthwhile investment.

“It’s significant that nearly half of people we surveyed (48 per cent) find that talking about money is reassuring, motivating or empowering, and those who want to fully understand their options to get a better grip on their financial future could consider seeking professional financial advice as a good start point.”

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