7 out of 10 adults are puzzled by financial matters lingo
Being informed about financial matters is essential to making sound decisions and staying in control of your money. Unfortunately, many people feel confused by the jargon used in financial discussions and services.
A recent study of UK adults reveals that seven in ten feel puzzled by financial jargon, while three-quarters don’t understand the concept of ‘the economy’[1]. Those aged 18-24 are the least likely age group to be confused by financial terms, with only 52% feeling puzzled compared to 69% across all age groups.
Most at a loss
However, younger respondents admit to being the most at a loss when it comes to managing money. 58% of those aged 18-24 confess they are perplexed by this task, compared to only 23% of people aged 55 and over.
The study revealed that younger people are also less likely to have heard of financial products and terms, which could explain why those aged 18-24 are the least confused by financial jargon. The survey also found that only 61% of 18-24s have heard of the term ‘pension’ compared to 97% of respondents aged 55 and above.
Financial terminology
In addition, only a quarter (25%) of 18-24s know about ‘contents insurance’ whereas almost all (92%) of those aged 55+ have heard this phrase. Furthermore, less than three-fifths (57%) of 18-24s recognise the term ‘inflation’.
The results suggest that although younger respondents may not be as confused by financial terminology as other age groups, they may lack understanding when it comes to some key financial products and money management skills.
Lack confidence
Despite having heard of some key investing terms, many people lack confidence in understanding what they mean. Just 43% of those who have heard the term ‘gilt’ know its meaning and only 59% of those aware of an ‘annuity’ feel confident in its definition. Similarly, 61% of people who have heard of an ‘ESG fund’ are comfortable with its meaning.
Many people find financial matters confusing and it can be easy to avoid the things we don’t understand. However, once these matters become clear, it can lift a huge weight off our shoulders.
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Source data:
[1] The research was carried out by Ipsos UK on behalf of Aviva. Ipsos UK interviewed a representative quota sample of 2,379 adults aged 18+ in the United Kingdom using its online i:omnibus between 1–3 November 2022.