'Dough' or 'Bucks'? How confusing financial terms have cost Brits billions

Confusing financial terms have cost Brits an estimated £26 billion.Confusing financial terms have cost Brits an estimated £26 billion.
Confusing financial terms have cost Brits an estimated £26 billion. | stock.adobe.com
Confusing financial terms have cost Brits an estimated £26 billion.

Research of 2,000 adults revealed 65 per cent have struggled to understand terms and acronyms used in financial documents, with 36 per cent of these claiming it has cost them £1,366.

Among the terms most likely to throw people off are APR (18 per cent), compound interest (17 per cent) and variable interest rate (14 per cent).

Paying more for something or being overcharged (16 per cent), having to pay interest or late fees (12 per cent), or paying more tax than expected, were among the ways people have been caught out.

Baffled by the slang

But this complex language could be leading to costly consequences for those living in the UK, who speak English as a second language, a separate poll of 500 revealed - with two-fifths regretting signing a financial agreement, compared to a third of native speakers.

And almost a quarter (23 per cent) ended up paying more for something than they had previously expected, in contrast to the 16 per cent of those born on the British Isles.

It also emerged 75 per cent of those who have English as a second language are baffled by the slang used to describe money, compared to nearly half 45 per cent of all Brits.

The research was commissioned by remittance provider Remitly Global, Inc, which has created ‘Quid’s English’ - an online glossary containing 25 confusing money phrases and slang terms to support anyone in the UK trying to navigate the nuances of money language.

The study also revealed the slang used across the country to describe money, with ‘dosh’ most common in Bristol and ‘wad’ popular in Newcastle.

A North/South divide emerged for certain phrases - with just 27 per cent in London describe their cash as ‘readies’, compared to 44 per cent in Manchester.  

While 33 per cent in the capital have used the term ‘wonga’ - rising to 46 per cent in Newcastle.

Across the south east, 61 per cent have ‘bucks’ in their vocabulary, but just over half (52 per cent) do in the north west.

Whereas ‘lolly’ is prevalent in the south west, with 46 per cent having used it in conversation, compared to 31 per cent in the north east.

Unique challenges

Generational differences also emerged - with Boomers and Gen X most likely to use ‘dough’, ‘bucks’, and ‘tuppence’.

Whereas Millennials and Gen Z will use phrases like ‘Gs’, ‘bags’, and ‘cheddar’ in comparison, the OnePoll.com research found.

Nine in 10 of Gen Z and 84 per cent of Millennials either didn’t know the meaning or incorrectly guessed ‘bluey’ is used to talk about £5, compared to 62 per cent of Boomers.

More than a fifth (21 per cent) believe this general confusion comes from phrases from yesteryear still being used by older generations.  

Danielle Treharne, for Remitly, said: “Moving to a new country presents unique challenges, especially when it involves navigating the complexities of new financial systems and learning new financial slang and terminology.

“The learning curve can be daunting, even costly, and it can often create barriers to accessing essential financial services.

“We’re constantly looking for ways to improve our customers' experience and to better understand their challenges.

“We believe in providing financial education and literacy resources that address common barriers - which is what inspired the launch of Quid's English.

“We hope this will help promote financial inclusion and individuals with cross border financial services needs.”

Top 10 confusing financial terms

  1. APR - Annual Percentage Rate (the total cost of your borrowing for a year with fees and interest included)
  2. Sub-prime lending
  3. In perpetuity
  4. Compound interest (the interest you pay on interest as well as the outstanding amount left to pay off)
  5. Annuity
  6. Progressive tax rates
  7. Variable interest rate (an interest rate on a loan that fluctuates based on an underlying benchmark interest rate or index that changes periodically)
  8. Capital gain
  9. Liquidity
  10. Arrears

Top 10 slang phrases used to talk about money and finance:

  1. Skint
  2. A rip-off
  3. To make ends meet
  4. Daylight robbery
  5. Rainy day fund
  6. Loaded
  7. An arm and a leg
  8. Bank of mum and dad
  9. Quid’s in
  10. Burning a hole in my pocket

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