By Daniel Hunter
People are changing their financial behaviours and developing positive money habits to deal with their money matters, say findings from a major new study published by the Money Advice Service.
However the report also reveals that half of UK adults struggle to keep up with their bills and credit commitments — up from one in three in 2006.
The service says its report - The Financial Capability of the UK - points to evidence of how millions of people are adapting to deal with tough economic times, and working hard to manage their money.
It adds that despite people being understandably anxious about their finances the evidence also shows how people have, over the past few years, become more diligent or vigilant about their money matters and suspicious of financial scams.
For example, two in three of us agree we’re ‘very organised when it comes to managing money’. People are also checking bank statements more carefully — over half of adults say they regularly check all incomings and outgoings on their bank statements to keep track of their money; and two out of five look for suspicious transactions. Furthermore, almost nine out of ten adults say they are saving.
Despite the positive behaviour, the study found many people have poor money skills and knowledge. For example, one in six adults was unable to identify the correct balance on a bank statement; and one in three did not understand the impact of inflation on their savings.
“In theory, money management is easy — spend less than you earn and consider your future, but the difficulty comes when applying this in the real world. This report reveals just how difficult it is at the moment for so many of us, but also highlights ways we are adapting to manage financially,” Caroline Rookes, chief executive of the Money Advice Service said.
“The Money Advice Service aims to encourage people to manage their money well so that they don’t make poor decisions — consciously or inadvertently - that trap them in a vicious cycle of debt. Our advice and support is here to help everyone make the most of their money so that, regardless of life’s ups and downs, they are not on the back foot but can reach their life goals.”
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