One in five young people are seeking out financial advice from social media, amid growing concerns about financial education in the UK.
According to new research from debt management company Lowell, one in four Brits don’t have a confident understanding of their personal finances, while almost half don’t understand key financial terms such as “overdraft”, “mortgage” and “arrears”.
84 per cent of Brits think that being taught about finances at school could help prevent financial issues in the future.
When asked where they would go to for financial advice, more than a third (36 per cent) said they would go to their bank, while 35 per cent would see a financial advisor. 30 per cent use Google searches, while 27 per cent rely on family and friends for advice, and nine per cent use social media.
However, the research suggested that social media is becoming increasingly influential among the younger generation, with 19 per cent of 16-25 year olds using platforms such as TikTok and Instagram for financial tips.
Lowell’s research found that 28 per cent of people in the UK don’t feel confident when it comes to handling their personal finances. 34 per cent claim to feel “very confident”, but that figure falls to 19 per cent among those aged 16-25.
Just a fifth (20 per cent) of those aged 16-25 knew what an overdraft was, and only five per cent claimed to know the meaning of arrears.
“It’s worrying to see how one in four people just don’t feel confident with their personal finances, given how critical this is to being able to manage your money well,” said John Pears, UK chief executive of Lowell.
“We really want to encourage people to get some help in order understand their finances better, through trusted, regulated channels that ensure all advice is in the individuals’ best interests.
“We believe it is so important for consumers to feel empowered and in control of their finances, here at Lowell we are talking to consumers daily and directing them for advice where it is needed. A range of independent and impartial support is available for anyone who is struggling with their finances.”