The British public’s financial problems will continue to get worse in 2009 unless immediate action is taken to increase the nation’s financial literacy. The call comes from the AAT along with its latest research which reveals just two in five (40.7%) people know what APR is despite interest repayments on personal debt totaling £81.8bn in the last 12 months. The news comes just weeks after a Conservative report revealed that some borrowers are paying interest of up to 10,000% on loans.
To conduct its study, the leading qualification and membership body surveyed over 2,000 UK citizens from across the country. Other key findings include:
· One in ten people think the safest place to put their money is under the mattress;
· Just three in five people (62.3%) know that credit cards are the most secure way to pay for an item over £100;
· Under half (48.0%) of the population know that £50,000 of their savings is guaranteed by the government if their bank goes into liquidation;
· Women (54.3% correct answers) are more financially literate than men (47.3% correct answers);
· Glasgow (54.2% correct answers) is revealed as the most financially literate city in Britain and Cardiff (48.4% correct answers) is revealed as the least;
* 45-54 year olds (60.3% correct answers) are the most financially literate age group and 18 – 24 year olds (40.9% correct answers) are the least.
Jane Scott Paul, Chief Executive of the AAT, says: “The results of our research paint a very worrying picture of the state of Britain’s financial literacy. We need to help people understand common financial terms, like APR, and introduce personal finance education into society at all ages. Otherwise how will people have the capacity to manage their money well?”
To help people learn more about these common financial terms, and demystify the jargon, the AAT has launched a new webpage: www.aat.org.uk/financemadeclear
I am slightly surprised that the knowledge of the UK is so low, you would think especially now when we have been so mis-guided by banks that people would understand more what was happening with their money to avoid getting into financial difficulties. I think people should be encouraged to be more aware of their own finances and take responsibility of any debt and manage their finances so they avoid debt issues.