Over one in 10 Brits feel ‘uncertain’ about their current financial situation – London Business News | Londonlovesbusiness.com

Despite the tricky financial landscape the UK is currently facing, Aqua’s research found that people predominantly still have positive emotions towards their financial situations with 15% of survey respondents expressing they feel ‘content’.

However, despite these positive sentiments, some of the UK population still feel unsure about their finances. The survey revealed that just over one in 10 (11%) Brits feel ‘uncertain’ about their current financial situation, and a further 9% feel ‘anxious’.

For Brits already feeling uncertain about their finances, having a low credit score can add to the strain. Among those with a bad credit score, 26% said it causes them stress, making it the most common response. However, feelings of frustration, anxiety, and concerns about the future are shared by 21% of respondents, highlighting the challenges many face. While these emotions are common, they also reflect a desire for greater financial stability and control.

However, a bad credit score doesn’t have to be a lasting challenge, and there are simple ways to improve it. After boosting their credit score, many Brits say they feel a lot more positive. The most common reaction is relief (35%), followed by feeling more in control (32%). Sharvan Selvam, Commercial Director at Aqua, says, “Improving your credit score might not always be top of mind, but it plays an important role in helping you reduce financial stress.”

Sharvan continues, “It’s incredibly encouraging to see so many people feeling more empowered and confident as a result of taking steps to boost their credit score, and that nearly a quarter of those we surveyed expressed a sense of pride in doing so. Building a stronger credit score is possible with small steps such as making credit repayments on time, which can be made easier by setting up a direct debit or repayment reminders.”

Only 21% of adults say they’ve never made a financial mistake, and impulsive purchases are found to be the most common mistake

With only 21% of UK adults claiming they’ve never made a financial mistake, it is evident that most people encounter some form of challenge at some point when managing their money.

Among those who admit to making a financial error, impulse buys appear to be the most common pitfall, with one in five falling into this financial trap. This can often lead people to spend outside of their means, and with 17% admitting to this mistake.

It’s not just overspending that is leaving people vulnerable – under-saving is almost as common. In fact, 16% of people admit their biggest mistake is not saving regularly enough.

The UK’s biggest financial lesson is the ability to save and budget, with 28% of respondents agreeing

The ability to save and budget is the biggest lesson for the population, with just under a third of UK adults (28%) finding that learning to save effectively is the biggest and most beneficial financial lesson they’ve learned. Creating and sticking to a budget follow close behind, with 17% and 26% naming these lessons the biggest they have learned, respectively. Financial literacy such as knowing how to invest is essential for making informed decisions about your money, yet 20% wish they had acquired this knowledge sooner.

Among other financial lessons, 22% of UK adults wish they had learned how to save for retirement earlier. This seems most prominent for those aged 45 to 64, with 27% saying so. However, 24% of those aged 35 to 44 agree, suggesting that adults are starting to consider their retirement saving plans around this time. These considerations are also evident in the 20% of UK adults wishing they knew why saving for retirement is important sooner.

When it comes to credit scores, UK adults seem content with the knowledge they hold, with 44% saying there is nothing they wish they had known sooner. However, 21% of people wish they had learned about how credit scores work earlier, with 28% of those aged 25 to 34 highlighting this as one of their top lessons. Additionally, 18% of UK adults expressed a desire to have understood the process of building a credit score sooner.

Over a third (35%) of Brits are working to improve their credit score

With 31% of UK adults admitting to having had bad credit scores, it’s positive to see that 35% of the population are actively trying to improve theirs, although even those with a good credit score still have room for improvement.

However, Gen-Z and Millennials are working the hardest to boost their credit score, with 69% of those aged between 18 and 24 saying they are trying to improve it, and 66% of those aged 25 to 34 are also attempting to boost their score. With the average age of a first-time home buyer in the UK being 33 (excluding London), it makes sense that this age group wants to start boosting their credit scores to help their chances of a mortgage application.

Sharvan says, “Having a bad credit score can impact your life in many ways; from being unable to take out a mortgage, to not being able to take out a mobile phone contract. However, there are a range of actions you can take to start improving your credit today.

“Check your financial history: Start getting your finances in order by reviewing your credit history. This will help you understand what factors may be holding you back so you know where to focus your efforts.

“Pay off existing debts: Lenders consider your existing debts when reviewing your application, so it can help to pay down some of your current debt before seeking more credit. Consider creating a written plan that outlines your total debt, remaining balances, and upcoming payment dates.

“Make your repayments on time: Lenders like to see that you can keep up with your financial commitments so be sure to always make your repayments on time and stay within your credit limits on any credit cards.

“Register for the electoral role: This help lenders verify your identity and can quickly add several points to your credit score.

“Keep old accounts open: By keeping open old accounts that are in good standing, you show lenders that you can successfully manage multiple credit accounts over a long period of time.

“Keep your credit utilisation low: avoid using more than 30% of your overall credit limit as this is perceived more positively by lenders.”