Do you frequently tuck unopened bank statements away in a drawer? Do you refuse to get a receipt from the ATM when withdrawing cash because you don’t want to see the cold reality of what your bank balance really is? Or are you scared to look at your credit card bills? You’re not alone. It seems that many of us would rather try to forget the state of our finances at any given time.
Research by financial company Credit Experts has found that, as a nation, we’re completely in the dark about our finances. Sound familiar?
The survey revealed that despite 96 per cent of us claiming to be familiar with our current finances, when pressed, the reality is a little different. When questioned in greater detail about their finances, it soon became quite clear that many people do not really have a clear picture of their credit commitments.
Only one in four of us can accurately say how much we have left to pay on our loans, while one in five admitted to only sitting down and planning their finances properly once every six months or more. And staggeringly, only one in 10 people admits to having any idea at all about how much debt they are in.
Jim Hodgkins, managing director for CreditExpert.co.uk , says: “It’s alarming to see that while almost the entire UK population think they are on top of their finances, many aren’t. Keeping track of your commitments and planning for the future are always important. In addition to checking bank and credit card statements, you also need to regularly check that your credit report is accurate and up to date.”
So, what’s stopping us knowing exactly what’s going on with our finances? A significant number of people admitted they where confused by the details of the APR – annual percentage rate – charged on credit cards, loans and overdrafts. While most people knew the limit of their overdraft, they didn’t understand what the APR was. Nearly half had no idea what it amounted to on the credit cards they held.
Younger people are particularly confused when it comes to managing their finances, with nearly a quarter of 18 to 34-year-olds admitting to being bad at it.
Almost one in five people have no savings at all.
The research revealed that despite being a nation increasingly dependent on credit, the Great British public are not very confident when it comes to applying for loans. Nearly a quarter would expect to be refused a loan of £1,000, 48 per cent believed they wouldn’t be approved for a loan of £10,000, while 66 per cent said there was no way they would be granted a loan of £60,000.
Hodgkins says: “This research provides a worrying insight into people’s perceptions of their finances. It is clear that many of us are not as familiar with our finances as we believe. This could lead to disappointment when people are planning to get a loan or change existing credit arrangements.
“Having a better understanding of your credit report could make the difference between being refused credit or being offered credit with a higher APR. If you want to take greater control of your finances, an online credit report monitoring service can help by providing a summary of your credit status and advice on how to improve it.”
For further information visit www.creditexpert.co.uk .