One in five lack confidence about personal finances

A fifth of adults in the UK lack confidence when it comes to their personal finances, while a further third feel uncomfortable talking about money, according to new research from the Money Advice Service.

These two statistics are a concern and many individuals may seek help or advice should their finances be worrying them. A large proportion of the UK is anxious about money and seeking assistance is vital if the situation starts to worsen.

Many people found it difficult to find their overall balance on a bank statement, identify the best rate available for an ISA account or pick the best out of two discount prices on a financial product such as a savings account.

The survey of 5,000 adults conducted by the Money Advice Service found just over one in ten people believe the Bank of England base rate is more than ten per cent, when in reality it is just 0.5 per cent and has been for a few months.

While there is a general lack of understanding about financial products, it is encouraging to see that more than four in five people are keeping track of their income and expenditure, while a further three-fifths of current account holders check their balance when online.

For example, four in five individuals make an effort to check their account balance before going shopping, which suggests they are attempting to maintain control of their outgoings. 

However, more than one in ten said they are not sure just how much is in their current account, within a £100 range, and only half keep a personal budget. This could lead to people falling into debt should they overspend and in the current climate this can be difficult to climb out of.

The research also found a massive nine in ten individuals are concerned about getting into debt problems.

Guy Shone, head of customer and market insight at the Money Advice Service, said: "We found that when people do a little bit of planning and budgeting it has a dramatic effect; improving confidence and self-esteem."

By Joe White