There is widespread confusion among Brits surrounding fundamental financial concepts, despite eight in 10 (83%) stating they feel confident in managing their finances, new research from financial education charity Money Ready has found.
Nearly half (46%) of those surveyed incorrectly believe that all debt negatively impacts a credit score, while over a third (37%) assume all debt is inherently ‘bad.’
The research is part of Money Ready’s Cost of Not Knowing campaign, which aims to raise national awareness around the tangible and emotional consequences of financial illiteracy.
While people may feel comfortable with day-to-day financial management, their understanding falters when it comes to long-term wealth and stability, the findings show.
Almost half (48%) of people admitted to having only ‘some’ or ‘very little’ understanding of investments, while 47% said the same for pensions and 43% for taxes. A similar proportion (41%) was reported for ISAs.
The research also highlighted significant myths surrounding credit and banking. Nearly a quarter (23%) of people believe it is impossible to go into debt if you only use a debit card, while another 23% believe it is never a good idea to use a credit card.
Leon Ward, CEO of Money Ready, said: “Confidence is usually a good thing, but in personal finance, it can be a double-edged sword. If you believe you’re an expert, you might be less likely to double-check the fine print or seek additional guidance.
“Misconceptions like believing all debt is bad or thinking you can’t go into debt with a debit card can have real-world consequences. But this isn’t a personal failing. Most of our financial habits are shaped by circumstance and trial and error, not education.
“To build a financially savvy population, we need to move past ‘surface-level’ confidence and equip people with genuine, deep-rooted knowledge. That’s how confidence becomes capability.”
Money Ready is calling for a systemic shift in how financial education is delivered, moving beyond basic tips to deep, life-stage-specific learning.
