Knowledge gap leaves some of us £84,000 worse off
UK adults are out of pocket by up to £84,000 each compared to peers over their lives to date due to a lack of knowledge and confidence around money and finances, a new report has revealed.
Digital wealth manager Moneybox said it commissioned the research to help identify how people could be better supported to achieve improved financial outcomes in life–saying doing so could inject £2 trillion of extra spending power into the UK economy.
It found that two-thirds of UK adults are at a financial disadvantage to the tune of £65,000 each on average, and more than a quarter said they do not feel they have ever learned how to manage their finances. Looking at the picture north of the Border, 62 per cent of Scots believe they have missed out on financial opportunities in life, with a third blaming a lack of financial knowledge specifically,and 30 percent citing low financial confidence.
Moneybox said that because most people in Britain never received any financial education in school, most have been left to manage their money through trial and error.
As for where people in Scotland currently go to seek advice/guidance, a third use personal finance expert websites, 23 per cent go to their bank or financial services providers, 15 per cent ask their spouse or partner, and 13 per cent ask either their parents or finance professionals.
Moneybox also found that respondents who said they rely solely on personal relationships to guide them in financial matters were found to be almost 30 per cent worse off than the average, while the fintech firm also found that confidence isn’t just generated by income, with those saying they were “confident” – the largest proportion of answers –earning between £25,000 and £50,000.
Looking at those with low levels of confidence, the average net worth was £58,000 behind those who feel more confident, (£114,000 vs £172,000), which Moneybox said extends to a gap of £1.3 trillion across the UK, and is even wider for people who have no confidence at all, with the rift stretching to £84,000 behind that of a UK adult with any level of confidence (£60,000 vs £143,000).