British Consumers ‘Uninformed’ About Personal Finance
Keywords: secured, loans, finance, brit’s, uninformed, lack, knowledge, credit
Some of the more simple matters regarding personal finance prove to be bamboozling to the nation’s adults, according to the latest research from Abbey.
The bank set more than 1,000 British adults a ten-question personal finance exam, similar to GCSE standard, with the number of adults not achieving a GCSE-level C grade or an O level pass numbering one in ten, the equivalent of 4.7 million Britons. Issues including credit card interest, negative equity and secured loans repayments were all tackled in the questions, which were taken from previous exam papers.
Abbey said that following the examinations, 25 per cent of those that undertook the tests scored the equivalent of an A*, whereas 30 per cent scored an A. When the 21 per cent that achieved a B level are added, some three-quarters are covered in the top three grades, but 24 per cent are not. “While most people are in the realms of a GCSE pass almost five million British adults would fail a simple personal finance exam,” said Steve Shore, head of banking at Abbey. “Quite worrying given we selected questions that we felt everyone with a bank account should know.”
Following the research, Abbey has also released a list of the top five questions that stumped those that took the tests. Some 86 per cent did not know that six weeks were allowed to pay back a balance on a credit card before interest is accrued, while just under half (47 per cent) were unaware what negative equity meant.
Almost a quarter (23 per cent) of those that took the Abbey exam did not know that non-payment of secured loans could lead to the house it is secured against being sold to cover the loan, while seven per cent thought that the contents of a house, rather than the house itself, would be sold to pay off the secured loan.
The Abbey research seems to support government plans to introduce a personal finance element into Maths GCSE and this is something that the bank itself is calling for. “Abbey certainly welcomes the government’s plans to introduce a much-needed personal finance element into the curriculum. We would also urge anyone who doesn’t understand something on their bank statement to contact their branch or a financial adviser,” Mr Shore said.
Other issues that puzzled those that took the test concerned unpaid cheques and bank statements, as well as the meaning of hire purchase agreement, something that left more than one in ten (12 per cent) confused.
In July, the ifs School of Finance welcomed the decision by the Financial Services Authority (FSA) to call for mandatory teaching of financial education in schools across Britain. The organisation welcomed the “stronger place” financial education would fill in the curriculum after the FSA called on Ed Balls to work to achieve this. Along with the Abbey research, a study by Lloyds TSB last month showed that young people are concerned about taking on too much debt, suggesting that education about products such as personal loans and current accounts could prove beneficial for schoolchildren.
Mark Dawson writes for Loan-Arrangers .co.uk where visitors can compare cheap loans online. Then apply for the best rate secured loans and bad credit loans available. visit today www.loan-arrangers.co.uk
Previous Articles Highlighter:
Of Jargon And Finance Tips (1)
Personal finance is no longer the jargon-ridden world that it used to be not so long ago. Yes, you will still encounter jargon. But there are so many ways in which we can get to know all kinds of financial gobbledygook.
Secrets To Avoid A Home Foreclosure (2)
Pick up a part-time job, sell some stuff on eBay, even rent out a room in your house for awhile for some extra cash. If worse comes to worse borrow enough money from friends or relatives to bring your payments current and then sell your house and pay them back.
Borrowing For A Business Venture (3)
However, the convenience of this method includes a disadvantage. If the business continues to borrow from the owner, there could come a time when the entrepreneur has no more to invest.
Getting Your House Ready For The Appraiser (4)
Most often, the valuation of your house will be dependent on the prices of homes in the neighborhood. So if you are new to the house buying business, it might make sense to shop for a home where the other houses and apartments seem to have a good value.
Insurance For The Four Legged Folks (5)
Pet insurance is one type that is growing in the growing insurance markets. Quite a few of us are familiar with some pet owners regard their pets as being as much a part of the family as their sons and daughters.
Enlightening Students About Credit (6)
After all, students do not have a terribly stable income. To land them with an unnecessarily expensive credit card offer would result in failure for that card. However, this is not to say that student credit cards have no cons at all.
Dental Insurance Is A Ripoff (7)
What happens now? You probably won't see this on the NBC Nightly News with Brian Williams but this my friends is the fleecing of America. Over 4 years you would have paid $3,200 in dental insurance premiums and you may be expecting your insurance company to foot the bill, but you'd be wrong.
10 Reasons Why People Don't Want To Be Rich (8)
4. They are simply too busy either with their jobs or family to have time to think about how to get rich. They have enough on their plates just trying to find enough hours in a day to make ends meet and have no interest in taking away anymore of their meagre rest time.
Student Loan Consolidation Information - How Credit History Affects Student Loans (9)
Both parties want to have good credit, first and foremost that requires a FICO of above 650, and the higher the better having a total score less than that will not make getting a loan impossible, nonetheless it might trigger the need to supply further information that may influence the decision and submitting that incidental data to the people who can be influenced is not always easy.
Choosing Your Malibu, CA Real Estate Appraiser (10)
You should also make a point to find the best appraiser that you can afford. If you hire an appraiser who is not that experienced, you will pay for it later when you discover that the property is not worth what you paid for it.
Student Loan Consolidation Information - What Are Co-Signer And No Co-Signer Loans (11)
Lowering that rate to 5% (the official amount for a need-based Perkins loans) reduces these numbers to $417.00 and $4,820.00, however keep in mind that the case assumes that re-payment begins straightaway, deferring repayment until six months after leaving school which is the most likely outcome will result in higher amounts unless the interest is deferred or subsidized, using a co-signer with good credit can considerably reduced the total interest paid along with improving your chances of getting desirable loan features, go through a few sample strategies by using a loan calculator which are available on-line, this information will become a critical part of any student loan consolidation information.
Student Loan Consolidation Rates - It Pays To Shop Around (12)
They usually have several options ready and waiting for the Graduate to explore. The banks and lenders offering student loan consolidation rates through these larger programs are obviously legitimate and will probably make the consolidation process much easier than outside loan programs would.
Foreclosure Epidemic Likely Means Additional Tax Liability (13)
By being relieved of the obligation to pay $50,000, the IRS considers that Joe has in effect put $50,000 in his pocket. The debt relief is subject to ordinary income tax.
Finding The Right Student Loan (14)
When is a good time to start? About half way through sophomore year in high school, you should start your search for your college funding! Ed Lathrop is a successful Real Estate investor, commodities futures broker and is an expert in the field of lending.
How To Sell Your Home If You Are Faced With A Foreclosure (15)
Consider all of your options carefully, try not to rush things unless you really need to, and you'll surely have a successful experience. Need to make a quick house sale?
The Right Penny Stock Can Make You Money (16)
But, generally speaking, a penny stock is any low-priced security that trades on one of two exchanges; the Pink Sheets or the OTC Bulletin Board. The Pink Sheets are an exchange where most startup companies first get listed.
How To Sell And Rent Back Your Home (17)
Here is some information about selling and renting back. The concept of selling and renting back is this: You have paid off a significant amount of money on your house, but you are facing some sort of impending event that will cause you to be unable to make more payments.
Choosing The Right Insurance For Your New Malibu Home (18)
After you have assessed the value of everything in your Malibu home, you will also want to add in what you know you will want covered and which category of insurance this will put you into.
Interested In A Home In Malibu? (19)
If you want to make a different type of investment in something that you know you can make a profit out of, such as a home in Malibu, then knowing the different types of real estate investments can help.
Homeowners Insurance Guide (20)
It covers restaurant bills, hotel bills and additional living expenses incurred while the home is being repaired. Generally, companies provide coverage for about 20% of the insurance on the structure of the house.
Newer Articles Highlighter:
Financial Freedom Not Reached Until Mid 50's (1)
Keywords: personal, loans, mortgages, financial, freedom Britons are not obtaining financial freedom until they get into their mid-50s, new research has indicated. Released today, Birmingham Midshires' Life 2 report shows that it is not until they reach 55 that consumers are free from various "pressing financial strains" such as paying mortgages and personal loans and supporting their children.
Car Buyers 'Need To Choose Suitable Finance Product' (2)
It is important to choose a finance deal which suits you best, leaving you free to sit back and enjoy your new car." Mr Chandler's comments were echoed in research carried out by uSwitch.com earlier this month.
Parents 'Increasingly Contributing Towards Children's Property Costs' (3)
Keywords: parents, helping, children, to, buy, property Parents are giving an increasing level of financial assistance to help their grown-up children get on to the housing ladder, new figures indicate. According to the movingimproving index carried out by Alliance & Leicester, mums and dads are contributing an average of 21,314 pounds to help their offspring purchase their first home - a rise of 3,637 pounds from the study carried out during the same time last year.
You Can Get Loans For Wanderlust (4)
It is not easy to go and apply for leave. Unless we have a week of paid leaves coming our way, several people are not eager to put in that leave application without some egging on.
Consumers 'Worried' At Thought Of Base Rate Rises (5)
ICM's study also showed that twice as many women (14 per cent) as men have grave worries about base rate rises. However, it was females who seem to be more willing to choose those financial products which could help secure their monthly repayments, as a third of such consumers take precautions in their choice of services, in comparison to about a fifth of males.
Mortgage Refinance-The Easy Way To Get The Adjustable Rate Monkey Off Your Back (6)
Though it's not something to be done annually, refinancing your home is one of the most important things you should think about, at least ever few years, experts say. LoanTheMoney is a resource site for those considering all types of loans.
Student Loan Consolidation Information - What Is The William D Ford Direct Loan Plan (7)
The most critical difference to many people will be the possibility that rates, charges and repayment terms could differ between the two, officially the interest rates of both Stafford and PLUS loans are fixed, nevertheless private lenders have some flexibility in other areas.
Why Is Credit Important For Your Federal And Private Student Loans? (8)
Make sure you have well known credit card companies that will report constantly to national credit bureaus about your circumstance so they will notice your progress and give you a good report to any lender.
Five Ways To Secure Online Financial Information (9)
3. Disconnect your computer when possible. Even when your computer is turned off, if it is still connected to a live internet connection it is possible for hackers to access the information contained on your hard drive.
Retirement Tax Planning Tips (10)
Maximizing the nontaxable amount of your retirement plan benefits by taking a lump sum distribution limited to your previous contributions. Planning the order and timing of (a) retirement plan rollovers and (b) IRA distributions to maximize the nontaxable amount.
College Student Credit Card Debt. Tips For Parents (11)
Do some comparison shopping and there's a good chance that you'll end up with a student card during your university years even if you do qualify for a Visa or Mastercard!
Student Loan Consolidation Information - What Is The FFELP - Federal Family Education Loan Program (12)
Over 90% of the funds are directed by the two types of Stafford loan, unsubsidized & subsidized, in the second circumstance the Federal government pays the interest on the loan accrued whilst the student is in school and for a further six months afterwards, unsubsidized loans requires the borrower to be responsible for any interest, if the interest is deferred as it most often until after the grace period, it is then added to the primary total.
What Is A Secured Loan? (13)
Keywords: Personal loans, uk, secured, loans, debt, consolidation, compare, apr, bad credit, student loan There are many types of loans available and the nuances of some can be confusing, but one thing is certain: all loans are either secured loans or unsecured loans.
Budget Planning For Youngsters (14)
Reckless usage of credit cards can result in credit card debts. Students should be aware of this danger before beginning to spend recklessly. A credit history can haunt one for years to come.
All About Bridge Loans (15)
What are the existing market conditions in regard to the sale of your existing property? Would it be possible to sell your existing property in the time frame set out in your finance package?
Employer Health Insurance Covers Fewer Employees Today (16)
The health insurers consolidate our disparate system to give the consumer, through the employer, a conduit to health insurance. Herein lies a part of the challenge each insurer faces.
Checking Out New Communities And New Home Builders In Cherokee County (17)
Ask about the builder selection process. In some communities, you'll have little choice or say in which builder actually builds your new home. The company may have specific builders with expertise in the style of home that you've chosen, or have a specific system for assigning builders to work with new buyers.
Some Great Options - When Purchasing New Construction (18)
And, the view that people want more often than not are properties with a water view. As was the case in years now gone by, development along waterfronts continues to a notable element of the overall new home construction in the region.
Why People Live In Gated Communities (19)
The percentage of new construction within the walls of gated communities is rising nationwide. - The top gated communities in Cherokee County are among the most sought-after neighborhoods in the metro-Atlanta area.
Custom Homes In Atlanta - Choosing A Builder (20)
Interviewing Builders of Custom Homes in Atlanta When you interview builders, have a list of questions prepared, and bring along a notebook so that you can take notes. It will help you later if you've recorded your impressions.
Permalink to British Consumers ‘Uninformed’ About Personal Finance