The findings of a research study conducted on 2,000 adults reveal that a significant portion of the population, approximately 65 per cent, has encountered challenges in comprehending the commonly used terms and acronyms in financial documents. The repercussions of this lack of understanding have resulted in 36 per cent of individuals facing a financial loss, with an average of £1,366 per person. Particularly troublesome terms for individuals include APR, compound interest, and variable interest rate.
The implications of this confusion are noteworthy, as individuals have found themselves paying additional costs, being overcharged, incurring interest or late fees, and encountering unexpected tax payments due to this linguistic barrier.
The impact of this issue is particularly significant for individuals whose first language is not English. The study observed that two-fifths of non-native English speakers expressed regret over signing a financial agreement, as opposed to only a third of native English speakers. Similarly, nearly a quarter of non-native English speakers ended up paying more than anticipated, compared to 16 per cent of UK-born individuals.
Commissioned by remittance provider Remitly Global, Inc, the research has spurred the creation of ‘Quid’s English’, an online glossary featuring 25 complex money phrases and slang terms aimed at assisting individuals in navigating the complexities of financial language.
An intriguing aspect unveiled by the study is the regional variation in slang terms used to refer to money across the UK. For example, the term ‘dosh’ is most prevalent in Bristol, while ‘wad’ is preferred in Newcastle. Furthermore, certain phrases display a distinct North/South divide in their usage, including terms such as ‘readies’, ‘wonga’, and ‘bucks’.
Additionally, generational differences play a notable role in the variation of terminology. The research reveals that older generations are more inclined to use terms like ‘dough’, ‘bucks’, and ‘tuppence’, while younger generations are more familiar with phrases such as ‘Gs’, ‘bags’, and ‘cheddar’.
The persistent use of outdated phrases by older generations appears to exacerbate the confusion around financial terms and slang. More than a fifth of participants cited this as the primary reason for the prevalent confusion.
In acknowledging these findings, Danielle Treharne of Remitly expressed a commitment to enhancing the customer experience by providing financial education and literacy resources. This commitment has led to the launch of ‘Quid’s English’, an initiative aimed at fostering financial inclusion and supporting individuals with cross-border financial service requirements.
The research serves as a compelling reminder of the critical importance of understanding the language used in financial documents and transactions. Without this understanding, individuals may find themselves at a disadvantage, whether it involves unexpected costs, unfavorable agreements, or missed financial opportunities.
In conclusion, the study underscores the significance of financial literacy and the importance of accessible resources to bridge the gap in understanding financial terms and slang. It is essential to ensure that individuals, irrespective of their background or language, have access to the necessary tools and information to make informed financial decisions.