Do You Understand All of These Financial Terms?
Financial terminology is continually thrown around as we navigate through the different stages of our lives. The need to entirely acknowledge and comprehend what some financial terms mean becomes most apparent when making difficult financial decisions such as how best to climb onto the property ladder and selecting the best saving account or investment product […]
Financial terminology is continually thrown around as we navigate through the different stages of our lives. The need to entirely acknowledge and comprehend what some financial terms mean becomes most apparent when making difficult financial decisions such as how best to climb onto the property ladder and selecting the best saving account or investment product that could provide the greatest return in the future.
With words and phrases in areas such as banking, savings, investments, pensions and mortgages more than likely to feature heavily in an individual’s handling of their personal finances – the expectation would be for them to have a firm grasp of common and recognisable financial jargon. Unfortunately, this does not seem to be the case, as 31% of Brits have shockingly admitted to signing a financial contract without knowing some or all the terminology according to research by Norton Finance.
Interested in financial competency, Reboot Online Digital Marketing Agency analysed findings from YouGov, who surveyed 1,916 British adults to see how confident they were with the meaning of a range of financial words and phrases.
Reboot Online found that ‘savings account’ is the financial term that most Brits are confident about at 92%. Thereafter, 78% claim to be assured by what a ‘cash ISA’ is. In third position, 74% of Brits feel confident enough to know what a ‘building society’ represents and can differentiate it from a normal bank.
Interestingly, despite regularly featuring in the small print of advertising mediums for potentially significant purchases like cars, only 64% of Brits are entirely confident about what a ‘fixed or variable annual percentage rate (APR)’ truly is. Information for immediate release Reboot Online Digital Marketing Agency.
Focusing specifically on the different types of mortgages and the terms related to it – Brits seem most confident knowing what a ‘fixed mortgage’ (72%), ‘mortgage deposit’ (63%) and ‘tracker mortgage’ (49%) is. Contrastingly, Brits are apprehensive about how a ‘shared equity mortgage (58%)’ and ‘offset mortgage’ (57%) respectively work.
On the other end of the scale, the British public were least confident about a ‘spread betting account’, with an overwhelming 67% unsure about its proper connotation. Closely by, 65% are shaky about what ‘corporate bonds’ are. 64% of Brits were equally unclear by a ‘tracker fund’ and ‘self-invested-personal-pension’.
Shai Aharony, Managing Director of Reboot Online commented: “Jargon specifically related to certain sectors and subject matters can be a mind field. Individuals can therefore often get lost in translation when trying to decipher them. Despite this, considering the fact that numerous financial terms have a substantial impact on minor as well as major saving and spending intentions, Brits should be more accustomed to them. This research certainly shows that Brits currently lack the knowledge and confidence to correctly understand a handful of financial terms in a range of important areas such as mortgages, pensions and savings. Going forward, there should be a real drive to educate Brits from an early age on the different aspects of the financial world that will more than likely affect their personal and business matters in adulthood.”
(Source: Reboot Online)