ISA who? Scots’ confusion over financial terms
• Study reveals many Scots struggle with basic personal finance terminology
• Over a third (37 per cent) are unsure about when the tax year ends
• More than half (56 per cent) don’t know which tax band they fit into
The Scottish public has become so saturated by the jargon associated with personal finances that they’re now confusing popular everyday acronyms for financial terms, according to new research from Barclays.
Nearly a sixth (15%) of people living in Scotland confused ROFL, internet slang for ‘rolling on the floor laughing’, as meaning ‘risk of financial loss’. What’s more, despite a third (36 per cent) correctly identifying GOT as meaning ‘Game of Thrones’, nearly a sixth (16 per cent) thought it stood for ‘General Ordinance Tax’ – a term that doesn’t exist – with one in 10 thinking it stood for ‘Greenwich Official Time’.
However, the level of financial confusion goes beyond just acronyms. Although 93 per cent of those surveyed in Scotland were aware that ISA meant ‘Individual Savings Account’, over a third of respondents (37 per cent) admitted they didn’t know when tax year end was, with over a quarter (26 per cent) thinking the event takes place in March. Over half (56 per cent) also revealed they didn’t know what tax band they fit into.
Clare Francis, Savings and Investments Director at Barclays, said: “We know that people struggle to wrap their head around all of the terminology associated with personal finances. However, it’s not always as complex as you first think, and if you brush up on the basics you might discover savings opportunities that could make a real difference.
“Everyone should have the tax year end on 5th April pencilled into their diaries, because it’s the last day you can use your ISA allowance before it’s lost forever. It’s also useful to know that the annual ISA allowance is increasing to £20,000 for the 2017/18 tax year, meaning that you’ll be able to protect even more of your savings from the tax man. If you’d like to improve your financial knowledge and gain the confidence to take control of your money, tools like Barclays Financial Wings are a great way to get started.”
Talking like my generation
Looking at the range of misunderstandings across people of different ages in the UK, almost a fifth (18 per cent) of 24-34 year-olds revealed they were unclear on what APR (‘annual percentage rate’) stood for. Comparatively, three-quarters (78 per cent) knew that ROFL meant ‘rolling on the floor laughing’, with 10 per cent not realising that ISA stood for ‘Individual Savings Account’.
As for the baby boomers, more than half (55 per cent) of over 55’s unsurprisingly had no idea what ROFL stood for, and a quarter (26 per cent) guessed ‘risk of financial loss’. A tenth thought LOL stood for ‘Lots of Love’ and a fifth of 45-54 year-olds mistook GOT for meaning ‘General Ordinance Tax’.
Two fifths (38 per cent) of 35-44 year olds confirmed they didn’t know when tax year ended. Surprisingly, a third (37 per cent) of over 55’s admitted they didn’t know which tax band they were in.