• Analysis from Moneybox’s found the financially confident have an average net wealth double that of those who lack confidence – regardless of income 
  • Time spent on personal finance found to be the biggest contributing factor to boost financial confidence 
  • Edinburgh, Cambridge and London are the most financially confident cities in the UK according to new research from Moneybox

 
More needs to be done to level the playing field when it comes to wealth generation in the UK, says Moneybox as it publishes research showing that, those individuals who are more confident in their personal finances, have an average net worth (£145k) that’s double the size of those that lack confidence (£78k), regardless of income.

Moneybox’s analysis found that those who identified as financially confident in regard to savings, investing and managing their personal finances overall are more likely to seek out financial information, guidance, and advice proactively across a variety of sources (80%). Almost half of this group, 48%, turn to family and friends for financial advice and a third use freely available expert information as their sources.

In addition, those with greater confidence typically devote more time to understanding and actively managing their personal finances – 52%, compared to just 12% of those lacking in financial confidence. For example, the confident were found to spend a lot more time researching options before making financial decisions (40%) compared to 12% of those with lower levels of financial confidence. Start 24% of the financially confident also dedicate a lot of time to learning about financial topics compared to just 3% of those who aren’t financially confident.

Another defining characteristic among those who are financially confident is that they are also more likely to have set short and long-term financial goals (27% and 34% respectively), compared to those that aren’t financially confident (6% and 9%). This group is also putting steps in place to take control of the finances with 33% setting and following a budget and 38% putting plans in place to save and invest in order to achieve their goals.

With Moneybox’s analysis highlighting the correlation between financial confidence and improved financial outcomes for Britons, the saving and investing platform is warning that without collective action, across government, regulators, and the industry, to help boost the nation’s financial confidence and knowledge many people will continue to miss out on opportunities to grow them realise the financial opportunities in life and build wealth for the future.

Those financially confident are also more knowledgeable about choosing the right products to achieve such goals. 34% of the financially confident are actively investing as part of their long term financial planning, compared to just 13% of the unconfident. 31% said they are prepared to switch products to secure a better deal compared to 8% of those who didn’t feel confident.

In addition, Moneybox identified the top 10 cities in the UK for financial confidence, with Edinburgh, Cambridge and London topping the table.
 

City Average financial confidence score Average net worth of financially confident (K) % higher than unconfident Confidence in saving Confidence in investing Confidence in managing personal finances  Confidence in planning for retirement 
Edinburgh 63.2% £142 10 x higher 80% 42% 86% 55%
Cambridge 62.9% £169 3 x higher 86% 38% 90% 53%
London 61.7% £165 4 x higher 83% 43% 81% 54%
Brighton and Hove 61.6% £131 2 x higher 86% 35% 88% 48%
Norwich 60.2% £108 4 x higher 83% 30% 88% 47%
Southampton 60% £133 3 x higher 84% 33% 87% 44%
Sheffield 59.8% £168 7 x higher 81% 33% 82% 50%
Bristol 59.7% £148 7 x higher 85% 35% 85% 49%
Leeds 59.5% £141 5 x higher 81% 33% 78% 55%
Leicester 58.7% £167 12 x higher 81% 31% 85% 48%

 
Brian Byrnes, Head of Personal Finance at Moneybox comments: “Part of the enduring legacy of poor financial education in this country is that most people do not feel equipped to make financial decisions with confidence. Everyone wants to do more with their money but many feel overwhelmed when faced with financial choices they don’t feel they fully understand. Our analysis clearly underlines the need for more to be done to help people achieve their financial potential in life.

While it cannot be overstated how important it is to build and embed positive financial habits early in life, the truth is that people figure out how to manage their money throughout life, often through trial and error, and opportunities are missed. That is why we as an industry need to evolve to offer more targeted support and guidance to help guide and support people as they grow their financial knowledge and confidence over time.

“One of the most exciting industry developments on the horizon is HMT and the FCA’s Advice Guidance Boundary Review (AGBR) which present the most exciting opportunity in over 10 years to revolutionise consumer finances.

“The review has the potential to enable trusted financial services providers, like Moneybox, to offer more guidance that is relevant to our customers’ circumstances, helping them to better understand their finances and make more informed decisions with greater confidence. Ultimately, the AGBR seeks to close the financial advice gap and in doing so will measurably improve the financial knowledge and confidence of millions of people in the UK. This is a truly exciting opportunity and we hope to see the recommendations from the AGBR embraced and legislated for by the new government recommendations taken forward by the new government so that we can enable more people to build wealth with greater confidence, now and for generations to come.”



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