Financial ignorance 'could be costing British people millions'
Britons doubt their abilities to handle their finances, and their ignorance could be collectively costing them millions of pounds a year, a bank claimed today.
Just 48% of people questioned thought they had a good understanding of personal finance matters, according to Halifax, Britain’s biggest mortgage lender.
While 73% of people knew the difference between an authorised and an unauthorised overdraft, only 52% realised they could move their debt between different providers.
Halifax estimates that current account holders could collectively save more than €122m a year by transferring their overdraft from one of the big four high street banks to a group charging a lower rate of interest.
A third of Britons did not know when the tax year ended, meaning many people could be failing to make the most of their annual tax-free savings allowances, while 33% did not know the difference between gross and net interest.
The research found that two-thirds of those asked knew that annual percentage rates (APRs) were a way of comparing interest charges on borrowing while 15% admitted they had no idea what the letters meant.
Eight out of 10 people said they supported the idea of personal finance being part of the national curriculum a figure which rose to 84% among men.
People in Wales and the West were most confident about their financial abilities, with 55% of the Welsh saying they had good understanding of personal finance issues, followed by 53% in the West Country.
The Scots were most modest about their financial acumen, with just 36% thinking they had a good level of knowledge, though when asked to answer specific questions they performed as well as, if not better than, people in other regions.
Halifax head of banking Jack Cullen said: ‘‘This research shows that when it comes to personal finance matters, people tend to hide their light under a bushel.
‘‘Many people do have a greater understanding of financial matters than they realise, which is encouraging.
‘‘But the research also showed that there are some worrying areas that need addressing, particularly on the issue of transferring overdrafts where a lack of understanding could really be hitting people hard.’’
