The average Brits scores just 2.6 out of 10 on a basic finance quiz, exposing the scale of financial ignorance in the UK.
A new survey, by credit card company Vanquis, reveals that just one in three people know the current rate of VAT and even fewer know how much you can pay into an ISA.
Around 2,000 people were asked 10 multiple-choice personal finance questions in an online quiz. Not one person got every question correct.
Mortgages and National Insurance were the areas causing Brits the greatest confusion with nearly all (95 per cent) having no idea how much money they could borrow on a mortgage. Only five per cent correctly answered that it is 4.5 times your earnings.
Meanwhile, nine out of ten people did not know the rate of National Insurance contributions for an employed, basic-rate taxpayer.
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According to the study, half of the UK population don’t know the difference between a Direct Debit and a Standing Order, and two thirds have no clue how much they can earn without paying income tax.
The results also highlighted how financial knowledge differs according to age, gender, location and income.
Men performed slightly better than women, with 13 per cent answering at least five questions correct, compared to 11 per cent of women. This comes after a separate study revealed women are far more anxious than their male counterparts and are living on the financial age.
People aged 55 and over scored best on the new test, while those aged 16 to 24 performed the worst, with an average score of just 2.1 out of 10.
People who earn more than £100,000 a year answered 3.6 questions correctly on average compared with 2.3 by those earning less than £15,000. However, four in five of the highest earners did not know what the minimum wage is.
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Bristol came out as the city with the best financial knowledge, with 20 per cent being able to answer 5 or more questions correctly. Liverpool came in a close second, with 16 per cent getting five or more correct.
Norwich was the worst performing city, with just 7 per cent getting five or more questions correct and just 1.56 per cent knowing how much they could borrow on a mortgage.
Find out how good your own financial knowledge is. Take the test!
Check out our jargon-free guides for everything you need to know about your finances including the Good Guide to Pensions, the Good Guide to Finances at 40 and the Good Guide to Impact Investing.
