One in three Brits have low or no confidence in their financial abilities

• Those with low confidence less likely to invest their savings to make their money go further
• Online banking services have helped two-thirds of people (64%) improve their confidence in their finances

Over a third (35%) of Brits have low or no confidence in their financial abilities, according to the first TSB Money Confidence Barometer¹. The research shows that those with low confidence are less likely to engage with their finances, therefore missing out on long-term savings and investments to make their money go further.

The research, based on responses from more than 5,000 adults, measures the nation’s confidence when it comes to managing their finances and explores the forces impacting how they feel.

The findings show that Brits’ confidence varies according to their circumstances – be that age, gender, housing status or location. TSB’s research shares new insights on what more can be done to help more people gain confidence with their money. And it confirms that while two in five people have increased their savings since the start of the Covid-19 pandemic, money confidence is greater amongst those with proactive savings habits and those who hold savings products.

Almost a third of Brits feel confused about financial products and services

The key drivers of money confidence include having a good understanding of financial terms and knowing how different financial products and services work. However, TSB’s findings show a significant proportion of adults are not confident in the use of such terms and struggle to understand how different financial products work, with financial jargon and complex terminology leaving nearly a third (30%) of people finding financial products and services ‘confusing’.

The research found that people in the East of England feel most confident about handling their money, with seven in ten (70%) saying they have moderate or high money confidence. At the other end of the scale, people in the North East feel the least confident, with more than half (52%) having low or no money confidence.

Low money confidence leads to Brits missing out on savings and investment opportunities

Two in five (37%) people have increased their savings since the start of the pandemic, with 35–44 year-olds having saved the most – an average of more than £7,000 for those who have seen their savings increase. However, TSB’s findings show that many are missing out on long-term savings and investments, particularly those with low confidence. A third (34%) of Brits with high money confidence are putting money into long-term savings or investments, dropping to nineteen percent of those with no confidence.

Almost one in five (19%) people say that a lack of savings is one of their top three financial concerns as we emerge from the pandemic.

Online banking helps improve confidence levels

Online banking became essential for many households throughout the pandemic, with just under a third (32%) of Brits using online banking more frequently than ever before. And the shift looks set to continue as almost all of those who have used online banking (95%) are expecting to maintain that level of usage once the pandemic ends.

Online banking services have helped two-thirds of people (64%) improve their confidence in their finances. The main reasons cited for online banking helping improve confidence were: the ability to easily access their balance (62%); easy access to all of their financial products (51%); planning ahead by knowing their outgoings (41%); and more confidence in being able to spot and block potential frauds (24%).

However, there remains a clear geographical divide in levels of confidence and use of digital banking services. Over two fifths (44%) of people in urban areas used online banking more frequently during the pandemic, compared to almost a quarter (24%) of people in rural areas.

Robin Bulloch, Chief Customer Officer at TSB, comments:

As we come out of the pandemic it’s important we continue to build people’s confidence levels to help them manage their money. At TSB we’re working hard to equip customers with the right products, tools, and support so they can make confident financial decisions to improve their overall financial well-being.

It’s also crucial that we work with the industry, government and stakeholders to provide better support to consumers to build financial resilience and a more money confident Britain.

1. Being able to make the right financial decisions
2. Being able to understand financial concepts, products and services
3. Knowing how different financial products and services work
4. Having a good understanding of what different financial terms mean
5. Being happy to put in effort to research different financial options
6. Feeling comfortable talking about money with friends and family

How TSB is responding

Through the pandemic, TSB has provided Money Confidence training, accredited by the Chartered Banker Institute, to over 3,500 of its colleagues in customer-service roles so they can help customers make the most of their money.

TSB has also launched new products to help customers feel more in control of their money, which include features such as savings pots, automatic spending round-ups, text alerts and fix and flex mortgages. Partnerships with ApTap and Wealthify have also enabled TSB’s customers to make the most of their money. 

The bank has seen a significant rise in customers using digital banking and has introduced solutions such as TSB Smart Agent and video banking to serve customers when it’s convenient for them. TSB is also continuing to invest in its branch network to provide the best face-to-face solutions. The bank is also trialling innovative ways to serve customers and recently launched 43 pop-up branch services and access to cash pilots to support customers in parts of the country where it takes longer to get to a branch.