More than a quarter of consumers think they could be losing money due to understanding of financial terminology

14th January 2022

More than a quarter (27%) of consumers think they could be losing money due to lack of, or insufficient, understanding of financial terminology, according to recent research from Aviva.

The insurer also found that women (30%) are more likely to think financial lingo could be losing them money than men (23%). To understand the saving and investing habits of consumers, Aviva surveyed more than 2,000 respondents from across the UK and found some notable differences between male and female respondents.

Compared to men (£449), women were found to be saving almost 40% less money (£272) and were also more likely not to save any money on a monthly basis. 1 in 6 (17%) male respondents said they don’t save any money, whereas nearly 1 in 4 (24%) women said the same.

Concerning the things consumers are saving for, male and female respondents agreed when it came to most ‘priorities.’ Perhaps unsurprisingly, women were less likely to say they are saving for a new car than men and more likely to save for Christmas, property buying, and property renovations and improvements. Women were also found to be more likely to put money away for their own and their children’s education.

The research also sought to find out consumers understanding of financial terminology and how it could be impacting their saving habits. To put consumers knowledge of financial terminology to the test, the insurer asked respondents to match some of the most frequently used financial expressions with their correct definitions.

Based on their own evaluation of their knowledge of financial lingo, just over 1 in 5 (22%) accurately evaluated their knowledge. A half of women (51%) were found to overestimate their knowledge, compared to just over 2 in 5 (44%) men. And while 1 in 3 (33%) men underestimated their knowledge, just under 3 in 10 (28%) women did better than they thought.

When asked whether they think lack of, or insufficient, knowledge of financial terminology could be impacting their savings, 3 in 10 (30%) female respondents said they think they could be losing money and a further 1 in 5 (21%) said they might not be getting as much return as they could. Almost the same proportion of men (22%) said the same, i.e. they may not be getting as much return as they could, due to lack of, or insufficient, understanding of financial lingo, but they were less likely to think that they could be losing (23%).

Alistair McQueen, Head of Savings and Retirement at Aviva, said “There is a close relationship between financial confidence and financial reward. The financial services industry has a responsibility to ensure that information is communicated in a clear and consistent manner. Our clarity and consistency will feed our customers’ confidence. Aviva has a host of valuable tools and information available on our website to help customers to do just that, including an explanation of the most frequently used financial terms and expressions. Aviva is committed to building on this support, for all our customers.”

Top 15 things respondents are saving for

What are you saving for? Men Women
Holidays/ Travelling 27.94% 25.34%
Emergencies 25.05% 24.27%
Retirement 27.63% 17.12%
New car 15.05% 9.67%
Christmas 10.10% 12.38%
Property – buying 8.56% 13.54%
Property renovations/improvements 8.87% 11.80%
Presents/gifts 7.73% 10.06%
To help family members 8.76% 7.16%
Furniture 6.80% 6.87%
Children’s education/university 5.15% 6.96%
Having a baby/adopting a child 3.40% 3.87%
Tools/equipment 5.05% 2.22%
Your own education 2.68% 4.26%
Designer clothes/bags 3.40% 3.19%

*In addition to any pension with an employer