Personal finance is an essential part of our daily lives.
It involves managing our money, making financial decisions, and planning for the future.
Whether it's investing in stocks, retirement planning, paying off debt or maxing savings, financial literacy is crucial to achieving our financial goals.
As April is Financial Literacy Month, the latest Appinio Hype Train Report was set to explore the different financial products and services available to consumers and provide an overview of the current state of finance and digital banking in the UK.
This article will summarise the most significant results and we will take a closer look at the current state of savings accounts, investment options, debt management, and more.
We'll begin by discussing the importance of financial literacy and its current state in the UK. Next, we'll take a deep dive into:
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April is Financial Literacy Month, a time when individuals and organisations focus on promoting financial education and awareness.
Financial literacy is essential because it helps people make informed and effective decisions about managing their money.
With the increasing complexity of the financial landscape, individuals must have a solid understanding of basic financial concepts to make informed choices regarding investments, savings, credit, and debt management. Without financial literacy, individuals may not fully understand the implications of their financial decisions, leading to poor choices that can negatively impact their financial stability and future.
In recent years, financial literacy has gained significant attention, and the topic has been widely covered in the news.
This increased focus is due to several reasons, like the growing complexity of the financial world, the rise of digital currencies, and the COVID-19 pandemic's economic impact.
The Appinio Hype Train Report reveals that 52% of Brits don’t feel they have enough knowledge to consider themselves financially literate. This lack of confidence in understanding finance, financial products, and financial decisions by half of the Brits puts them at a disadvantage.
It's important to have, at least, a basic understanding of different financial products such as savings accounts, investments (including stocks, bonds, mutual funds, and ETFs), retirement planning options, or credit scores.
The latter ones are used by lenders to determine the creditworthiness of individuals. A good credit score can help secure better loan terms and lower interest rates.
It's also important to understand basic financial planning concepts such as budgeting, debt management, and insurance.
By improving financial literacy and understanding these concepts, individuals can make better financial decisions and improve their overall financial wellbeing.
There are a variety of financial products available in the UK that can help people achieve their financial goals.
Here are some of the most popular options in the UK:
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By understanding the different financial products available, individuals can make informed decisions that align with their financial planning goals.
According to our survey, here are some key highlights of financial products owned by Brits:
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The Appinio Hype Train Report shows that a considerable proportion of Brits (38%) seek advice from their friends and family members to gather information about financial products, while 35% rely on traditional banks, and 33% on financial advisors.
Surprisingly, over a quarter of Brits (27%) turn to social media platforms (excluding YouTube), for financial advice.
Among the younger generation, particularly Millennials, the number of people seeking financial advice from social media platforms is even higher, with 43% using this medium.
YouTube and podcasts are the preferred channels for 42% and 38% of Millennials, respectively.
These statistics indicate that the traditional channels used by financial institutions to educate and inform their customers need the support of new and innovative ways to educate and engage younger demographics.
Digital banking has become an increasingly popular option in the UK, especially among younger generations. Digital banking are banking services that are available online or through mobile apps, allowing customers to manage their finances on-the-go.
Additionally, digital banks often have lower fees and higher interest rates on savings accounts, making them an attractive option for budgeting and saving.
42% of Brits hold an account at a digital bank and 11% of Brits are planning to open one.
Some of the most common reasons why UK respondents have switched or are considering to switch to a digital bank were:
Attractive mobile / web app (52%)
Better accessibility (46%)
Easier to use when compared to traditional banks (42%)
Better financial products (35%)
The most common reason for switching to a digital bank is the appeal of an attractive mobile or web app, followed closely by better accessibility. This suggests that consumers are drawn to digital banks because of the convenience and ease of use provided by their technology.
Additionally, a significant portion of respondents cited ease of use as a factor in their decision to switch to a digital bank. This could indicate that consumers find traditional banks to be more complicated and difficult to navigate, and that digital banks offer a simpler and more streamlined experience.
Interestingly, some consumers also cited better financial products as a reason for switching to a digital bank. This suggests that consumers are not only attracted to the technology provided by digital banks, but also to the financial services and products that these banks offer.
Finally, a smaller but still significant portion of respondents cited ease when doing international transfers as a factor in their decision to switch to a digital bank. This could indicate that digital banks are seen as a more convenient and cost-effective option for international transactions compared to traditional banks.
There are many digital banks in the UK, each with its own unique features and benefits. Some popular digital banks in the UK include Monzo, Starling Bank, and Revolut.
Although digital-only bank account owners may attest to the product's value, the level of trust from the general public towards these banks is still lower than that for traditional banks.
89% of those who do not have a digital-only bank account find traditional banks trustworthy to some extent, while only 67% say the same for digital-only banks. But there is a way to win the hearts and loyalty of these detractors.
When asked what offers or features would make they switch, digital bank detractors listed the following ones:
Overall, these statistics suggest that people are looking for tangible benefits when it comes to digital banking, such as cashback, lower fees, and instant money transfers.
Savings are an essential component of personal finance, providing financial stability and a safety net for unexpected expenses.
As we’ve read before in this article, a savings account is a common financial product, 58% of Brits hold one.
It can be opened at banks or other financial institutions. It allows individuals to save their money and earn interest on the balance. Savings accounts are a low-risk investment option, making them ideal for people who want to protect their money while earning interest.
The Appinio Hype Train Report reveals that one in five Brits (21%) has less than £1,000 in savings and that two thirds (66%) manage to put aside less than £500 each month.
But what are the things Britons are saving for?
Let’s have a look at their saving goals.
However, reaching some of these goals seems like a daunting task for Brits.
When it comes to saving for retirement, over one third (38%) of Brits don’t feel confident in their ability to save enough.
One third (30%) is not confident in saving enough money to start their own business and 28% doesn’t think they will be able to buy rental property with their savings.
While 26% don’t feel confident they’ll be able to save enough to afford to pay a house or pay mortgage for a house.
Finance and personal finance are topics that affect everyone and are becoming increasingly important in our modern world.
The shift towards digital banking and the availability of various investment options have made it easier for people to manage their finances and grow their wealth.
However, it is essential to understand the various financial products available, their benefits, and their risks and invest in increasing the levels of financial literacy.
This article and the latest Appinio Hype Train Report have explored some of the most common types of investments, the reasons why people switch to digital banks, and what Brits are saving for and hopefully, provided food for thought for the development of the next generation of financial products and services.
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