New research has found that seven in 10 Brits are left overwhelmed by the amount of jargon used around money and savings.
Half admitted they did not understand personal loans, APR (Annual Percentage Rate), interest rates, tax codes, dividends, rebates or the stock market. Whilst just a fifth are confident they could explain what an unsecured loan is.
The research, commissioned by Post Office, found a further one in six have been caught out when using financial terminology in a social situation by not knowing what it really meant.
It also emerged that over half of Brits don’t have a clue what their credit score is – but do know what it means, while 66 per cent had no idea what the Bank of England interest rate is.
The high rate of confusion caused by ‘overwhelming’ financial jargon has put Brits off borrowing, with one in five citing it as an obstacle preventing them from applying for a personal loan.
Despite this, 59 per cent of Brits have previously applied for one with an average borrowing of £8,000. The most popular reasons for taking out personal loans were for buying a car, home improvements, debt consolidation, holidays and to cover medical bills.
With 18–25-year-olds making up 40% of Brits to take them out for plastic surgery, pets and student debt. Whereas 35–44-year-olds had the highest probability of using a personal loan to pay for a wedding and debt consolidation at 27% and 25% respectively.
Over a third said they chose to use a personal loan to feel more in control of their finances, with a quarter saying it provided more structure to help with repayments than overdrafts and credit cards. Whilst a fifth felt it was less awkward than borrowing from family or friends.
The Post Office’s research also found that 44 per cent admit they sometimes feel confused when speaking to finance experts – with a fifth not questioning the meaning or jargon in such a situation. A third said they keep quiet as they don’t want to show their ignorance while 22 per cent would just sign on the dotted line and hope for the best.
However, this has seen almost a quarter end up in difficult situations financially as a result of not questioning the wording in paperwork.
Ed Dutton, Director of Financial Services Products at Post Office, added: “The financial world is full of jargon and phrases which can be confusing. It’s concerning that our data suggests that many adults don’t feel comfortable in challenging what these phrases actually mean, with some willing to sign for something they don’t necessarily understand. We believe it’s important to speak to customers using straightforward language so that they feel confident in their financial decisions.
“Personal loans can be used for a variety of reasons and can help people get to where they need to be, whether that’s buying a car, extending a home or paying medical bills. Yet many are put off exploring this option due to confusing terminology. It is surprising that many do not feel confident on what the Bank Rate is which can have a significant effect on the interest rates of loans and mortgages.
“Taking the time to do your homework and seeking help on jargon along with tools such as loan checkers – to determine loan eligibility – are really valuable in deciding whether this is the right product to meet your needs. This can help to identify financial options which may be better suited to the individual.”
Court grants Police 36 hour extension to detention of three held for Bridgend baby death investigation
Ryanair to offer more flights through Cardiff next year
Working on Christmas Day is like being with a ‘second family,’ say Wales Air Ambulance frontline staff
‘That colliery holds our history’: Council aims to change the fortunes of the Cefn Coed Colliery Museum
Briton Ferry primary school welcomes donation from Amazon
Joe’s Ice Cream plants 100 trees to rejuvenate local green areas
Celebrity chef James Martin turns up the heat with a brand new 2023 tour visit to Swansea Arena
Castell Howell serves up sustainable menu at Nuffield dinner
Three arrested after bodies of two babies found in Bridgend
Rob Page: ‘We can’t sit and cry over Iran loss’
Free bus travel returns to Swansea for Christmas
Date set for Llanelli Christmas Carnival and lights switch-on
Street pianos to bring music and colour to Swansea’s streets
Four Pembrokeshire women to take on ‘world’s toughest row’
Brynhyfryd pub gets brand new look in time to celebrate World Cup
UWTSD to host Cerebra families during Swansea Christmas Parade
Gavin & Stacey star Ruth Jones says getting honorary doctorate from Open University was ‘tidy, lush and crackin’
Swansea set to host football World Cup Fan Park
Swansea Christmas Parade: What you need to know for this Sunday’s event
Christmas multipack Coke recalled as packing error means some zero sugar packs have regular cans included
Christmas6 days ago
Morriston community groups supply festive fun for heritage event
Gorseinon6 days ago
Gorseinon GP warns antibiotics may do more harm than good against seasonal viruses
Swansea6 days ago
Martin Nicholls named as Swansea Council’s new Chief Executive
Business3 days ago
Carmarthenshire logistics company celebrates 50th anniversary by holding a family fun day in aid of Wales Air Ambulance
UK Government6 days ago
Liberal Democrats table bill to give Wales the power to create Bank Holidays
Fostering & Adoption6 days ago
Swansea 10 year-old wins national fostering award
Photography4 days ago
Swansea man wins Historic Photographer of the Year competition
Swansea4 days ago
Swansea now third busiest train station in Wales – but overall ridership down on pre-pandemic levels