We look at the UK’s financial awareness gap and why it’s never too late (and more important than ever) to learn the basics.
Financial confidence is built from understanding, not income
When it comes to learning about your finances, it isn’t a numbers game. There’s no exam to pass or tutor on hand to explain a textbook (and oh, what a big textbook it would be). But that’s no bad thing – because the key takeaway is: money management isn’t about getting an A* in maths, it’s about understanding the basics, so you can build your own financial picture and work towards your own financial goals.
You don’t need to earn more money to feel confident about your finances
Everyone’s circumstances are different. Mansion dwellers may be land rich but cash poor with loans, debts and rising bills to worry about. While a two-up two- down could be a sign of financial frugality in favour of luxury holidays and a hefty emergency savings fund. We all know the old saying about the grass not always being greener, but in this day and age maybe we should all take the time to remember what we see on social media is often a filtered version of reality.
The important thing is to learn a few core concepts, setting clear goals and using the tools that help – from budgeting apps to regulated advice. It’s about taking control by understanding your money, where it’s going now and where you want to redirect it.
So, whether you’re starting school, waving your kids or grandkids off through the school gates or simply looking to reset your finance fundamentals, this back-to-school season could be a perfect time to re-educate yourself financially.
Being confident with money isn’t the same thing as feeling confident with money
Do most people think they're financially savvy? According to IFA magazine, almost 80% of UK adults do. 78% consider themselves financially literate, even though:
71%
claim not to know how a savings account works
32%
can correctly calculate compound interest
35%
struggle to explain what an ISA is
19%
run out of money each month
But it’s not just academic, 19% of those who say they’re financially literate still run out of money every month. For those who don’t consider themselves financially literate, that figure jumps to 41%.
This confidence gap isn’t just about knowledge. It’s about feeling in control, reducing money stress and being financially stable. We’re in a world where we make money choices every day and so financial education has never been more important.
Are gaps in education becoming gaps in your budget?
Financial education isn’t just for students in the classroom, though the UK Finance education report did find 86% of UK adults feel more should be done to give financial education in schools. The report also found real money knowledge to UK adults is about understanding the basics, like:
- Budgeting and tracking spending
- Knowing how savings work (and what they’re for)
- Protecting yourself against scams or poor advice
- Making informed choices about your finances - from mortgages to everyday spending
In tangible terms, these gaps could be translating into a real strain on budgets.
Research from Hodge shows:
- 45% of 18-34 year olds would need to borrow money to cover a £500 emergency
- Even among 45-54 year olds, nearly 20% would need to the same
- Common unplanned expenses include car repairs (38%), home fixes (29%) and vet bills (17%).
So, while we talk about budgeting and saving, we also need to understand why we’re saving, what people use emergency funds for and how to avoid financial blind spots.
Your money mindset is linked to your mental wellbeing
Modern money behaviour has shifted. How we think about money, how we talk about money and where we learn about money, is all changing. The language we use today embraces a more open, honest conversation around personal finances and improving your money mindset.
“Don’t talk about money” is something many of us may have heard from older generations. But in reality, talking about money is exactly what we should be doing – sharing experiences, learning from others and opening up about the reality of managing costs.
Any gap in knowledge shrinks the moment there’s a transparent, factual conversation around it.
Social media advice or just social noise?
The rise of Finfluencers (Financial influencers) has likely played a part in younger generations feeling more confident and financially aware. Without formal financial education, platforms like TikTok and Instagram have become a go-to space for digestible and related money advice.
Quick tips, relatable language and clever hacks, it’s no wonder Finfluencers have grown in popularity. But the truth is, not all financial advice is created equal.
Not all Finfluencers are qualified financial advisers. They’re also not regulated or bound by the same rules as financial institutions likes banks under the FCA’s Consumer Duty. This doesn’t mean you shouldn’t listen, but be cautious. Ask yourself if it it’s accurate, right for your own situation and if it could put your money at risk if followed blindly.
If you’re unsure, look for a qualified independent financial adviser on site like unbiased.co.uk.
Why the language of money is changing
Spending money, usually excessively or impulsively, in an attempt to cope with feelings of anxiety or stress about the economy or the future, even if it heightens feelings of financial anxiety or future financial issues.
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Doom spending
Spending money, usually excessively or impulsively, in an attempt to cope with feelings of anxiety or stress about the economy or the future, even if it heightens feelings of financial anxiety or future financial issues.
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Money dysmorphia
Money dysmorphia is an imbalance between your finances and feelings about them, such as feeling richer than you are (and spending in such a way) or feeling you are poorer than you are and being overly careful of all spending.
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Loud budgeting
Being openly vocal about financial boundaries so not to spend beyond your means or to ensure your savings are or financial goals remain on track.
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Soft saving
Putting money aside for holidays and hobbies so you are in a position to splash out without guilt when you need to.
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Cash stuffing
Also known as the envelope method, cash stuffing is using cash to pay for goods and services so you are more present and thoughtful about unplanned expenses and prepared for essentials like bills and groceries.
These aren’t just trending terms, they reflect a new way people see and behave when it comes to their money. It not simply transactional – it’s emotional, psychological, cultural.
Financial behaviours are linked to mental wellbeing and vice versa. Understanding money habits can be a glimpse into how people are coping more broadly and making changes. A money mindset can have a positive impact on mental wellbeing too.
Make understanding money a lifelong skill not a one-time lesson
You don’t need to be a financial expert to feel in control of your money. You don’t need to understand the fine detail of compound interest, diversification or inflation, that’s what financial advisers and specialists are for.
But building a strong foundation in the basics, such as knowing how savings accounts work, understanding how to budget, or recognising which debts to prioritise, can make a big difference.
Financial awareness isn’t about knowing everything, it’s about knowing enough to ask the right questions, challenge what doesn’t make sense and recognise when you need support.
Whether it’s planning retirement, making a big purchase or understanding your outgoings, having financial confidence gives you clarity to make informed decisions and reach out to experts for help when you need it.
This article is correct at time of publishing and for general information purposes only. We recommend you speak to a professional financial adviser for advice. You can find a financial adviser and further personal finance information at https://www.unbiased.co.uk/.
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