Not knowing where to start when it comes to tackling your finances and a general lack of know-how is costing the average adult more than £640 a year.
The biggest mistakes include leaving money in a low or zero-interest account (made by 28 per cent of people), not switching to cheaper deals such as for energy or broadband (22 per cent) and paying for unused subscriptions (20 per cent), according to a survey of 3,000 people by the financial education charity Money Ready.
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The Times reported last month that £324.8 billion is sitting in current accounts that pay nothing, with 6.5 million of those accounts holding more than £10,000, and 340,000 more than £100,000.
Money Ready asked respondents to estimate how much they had lost because they had put off making a decision, or made the wrong choice. Some 43 per cent said that better budgeting knowledge could have saved them money, while 34 per cent admitted that they had avoided making a financial decision because they were confused about what to do.
Leon Ward from Money Ready said: “At a time when many families are feeling stretched, our research reveals a very real yet hidden drain on people’s wallets.”
Ward pointed out that across three decades losing £640 a year lost to poor financial knowledge and delayed decisions would add up to more than £18,000. “This could have gone towards savings or life opportunities,” he said.
The Times Smarter with Money campaign is calling for better financial education for schoolchildren as part of an effort to turn Britain into a nation of investors.
The Money Ready report found that 35 per cent felt they had learnt financial skills too late. The average age that adults say they were when they learnt about investing was 28, with 38 per cent saying they wished they had learnt about it earlier. Many also wished they had learnt about pensions (34 per cent), budgeting (27 per cent) and credit scores (22 per cent) earlier.
From 2028 the national curriculum in England will be changed to ensure that secondary school pupils get lessons in mortgages, pensions and budgeting, which will also become part of citizenship lessons. Our campaign is calling for all secondary school children to have at least 15 hours of financial lessons each year.
Money Ready, which is backing the campaign, found that 74 per cent of those surveyed believed schools should provide more money management education, and 70 per cent believed it is a more important skill than learning to drive.
Ward said: “The cost-of-living crisis has made financial confidence and capability more important than ever, yet millions of people are still navigating the system without the basic knowledge they need. That has to change, and it starts with making financial education lifelong, inclusive, and embedded in every school and financial service.”