{"id":4906,"date":"2026-01-27T10:55:01","date_gmt":"2026-01-27T10:55:01","guid":{"rendered":"https:\/\/discountagent.co.uk\/blog\/?p=4906"},"modified":"2026-02-16T16:13:46","modified_gmt":"2026-02-16T16:13:46","slug":"what-not-knowing-about-investing-is-actually-costing-you","status":"publish","type":"post","link":"https:\/\/discountagent.co.uk\/blog\/what-not-knowing-about-investing-is-actually-costing-you\/","title":{"rendered":"What Not Knowing About Investing Is Actually Costing You"},"content":{"rendered":"\n

Here’s a number that stopped me mid-scroll: 78% of UK adults reckon they’re financially literate. Sounds decent until you see the next stat from the same Pay.UK research\u201471% of those same people couldn’t explain how a savings account actually works. And when asked to calculate compound interest on \u00a31,000 at 5% annual rate, only 32% got it right.<\/p>\n\n\n\n

That gap between confidence and competence is where the money disappears.<\/p>\n\n\n\n

The UK has a genuine<\/a> financial literacy problem, and it’s not some abstract policy concern that only affects other people. According to abrdn’s Savings Ladder Index, 23.3 million British adults\u201444% of the population\u2014have poor financial literacy. Those with high financial literacy scores have, on average, \u00a320,000 more in their pensions than those with low scores. They’re also nearly twice as likely to hold investments in the first place (39% versus 21%).<\/p>\n\n\n\n

So while millions of us think we know what we’re doing with money, the numbers suggest otherwise. And that knowledge gap has a price tag attached.<\/p>\n\n\n\n

Millions Started Investing Without Understanding the Basics<\/strong><\/h2>\n\n\n\n

The pandemic changed how Brits interact with the stock market. Between lockdowns, stimulus payments, and apps that made trading feel like a mobile game, retail investing went from niche hobby to mainstream activity almost overnight.<\/p>\n\n\n\n

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The FCA’s Financial Lives Survey shows<\/a> the proportion of UK adults holding investments rose from 38% in 2020 to 41% by 2022. By 2025, private surveys put that figure at 26% directly holding stocks and shares\u2014roughly 14 million people. Stocks and shares ISAs are held by 17% of adults (9.3 million), making them the most common mainstream investment product after direct share ownership.<\/p>\n\n\n\n

New investment account openings surged 11% in 2021 versus 2020, though they dropped 48% in the first half of 2022 as reality set in. That initial wave brought in younger, more diverse investors who the FCA noted were “potentially prompted in part by the accessibility offered by new investment apps.”<\/p>\n\n\n\n

Accessibility is brilliant for democratising finance. The problem is that downloading an app doesn’t teach you anything about what you’re doing with the money inside it.<\/p>\n\n\n\n

The Actual Cost of Not Knowing What You’re Doing<\/strong><\/h2>\n\n\n\n

Being bad with money costs a lot. The average UK adult spends about \u00a3640 a year on bad judgments, blunders that aren’t essential, and fees that aren’t necessary. That adds up to more than \u00a318,000 over a lifetime (and that’s before you even think about the money you could have gained by investing it).<\/p>\n\n\n\n

The FCA is especially worried about young people taking too much risk when they invest their own money. Their study showed that 59% of amateur investors with less than three years of expertise would be in a “catastrophic circumstance” if they lost a lot of money in their investments. That number is only 38% for those who have been doing it for more than three years. Experience is crucial, but experience without knowledge is just a waste of time and money.<\/p>\n\n\n\n

Where the Money Goes Wrong<\/strong><\/h3>\n\n\n\n
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