Nearly 4 in 10 UK adults aren’t prepared for a financial emergency

Nearly 4 in 10 UK adults aren’t prepared for a financial emergency, survey reveals

Key findings from the research:

• Just 60% of Brits feel in control of their day-to-day financial decisions, yet over a third admit they are not prepared for a financial emergency, highlighting a clear gap between everyday confidence and long-term financial resilience.

• 41% of UK adults say their finances have had a negative impact on their mental health, while 36% say trying to understand their finances makes them feel stressed, and 37% admit to losing sleep over their finances.

• 40% admitted they have struggled to manage their finances over the past year due to rising costs, underscoring how even when feeling financially in control day-to-day, people continue to be affected by economic changes.

• 34% of UK adults aren’t confident they will achieve their financial goals, while 30% say they have no financial goals whatsoever.

Commenting on the findings, Derence Lee, Chief Finance Officer at Shepherds Friendly, stresses the importance of proactive financial planning. Derence says:

“Our survey showed that many people feel unsure about different areas of personal finance, from investing to insurance. But understanding key financial topics and the products that can help plan for the future is essential for feeling confident when making decisions about your money. Improving financial literacy can benefit everyone, whether you’re just starting out or already thinking about retirement.

“There’s plenty you can do to build your money skills. Even small steps, like exploring online learning tools, using budgeting apps, or reading trusted resources, can make a real difference. For those who feel unsure where to start, speaking to a qualified financial adviser can help turn confusion into clarity”

“There’s also a responsibility on providers of financial products to make their offerings easy to understand. At Shepherds Friendly, we aim to be a jargon-free zone, helping people learn about our products and personal finance topics so they can make informed choices. By improving financial knowledge, we can all make smarter decisions, feel more confident, and build a stronger financial future for ourselves and our families.”

More information can be found in the press release below, or the full survey can be found here: https://www.shepherdsfriendly.co.uk/resources/money-literacy-2025/

Less than a quarter of British adults passed this financial literacy test

New research from Shepherds Friendly reveals that financial literacy levels in the UK have fallen compared to previous years, with fewer than one in four Brits able to pass their money literacy test.

• Just 23% of Brits passed Shepherds Friendly’s money literacy quiz, down from 49% in 2024.

• Men were more likely to pass than women (29% vs 17%), while only 9% of 18- 24 year olds achieved a passing score.

• Self confidence in finance topics revealed to be low, with investing, ISA saving and pension planning being the top three areas of struggle.

• Young people are the least confident overall, with 51% saying they are struggling to manage their finances.

As financial literacy becomes increasingly crucial in navigating modern life, a staggering 70% of Brits believe that financial education should be a mandatory part of the school curriculum.

To find out more about the state of Britain’s financial literacy, Shepherds Friendly has conducted a survey of 2,000 Brits on their knowledge of ISAs, investing, insurance, income protection and general personal finance. The results reveal significant insights into the nation’s understanding of essential financial concepts.

You can read the full research here: https://www.shepherdsfriendly.co.uk/resources/money-literacy-2025/

Fewer than one in four Brits passed Shepherds Friendly’s money literacy test

With just 23% of those surveyed passing the test, this indicates that there are substantial gaps in Britain’s financial literacy. Shepherds Friendly also conducted a money literacy test in 2024 which 49% of people passed, and in 2023 which saw a pass rate of 27%, suggesting that financial understanding has slipped.

In the most recent test, men were more likely to pass than women (29% vs 17%), while younger adults are struggling the most, with only 9% of 18-24 year olds achieving a passing score compared to 34% of those aged 55 and over.

Nottingham was revealed to have the highest pass overall pass rate at 33%, followed by Bristol (30%) and Brighton (29%). Meanwhile, Leeds had the lowest pass rate at just 15%.

Young people face the biggest knowledge and confidence gaps

Confidence is also low across key financial topics. Nearly half (48%) of Brits said they don’t feel confident investing, 43% aren’t sure which ISA suits their goals, and 39% lack confidence with pension planning.

However, younger generations were consistently found to have the lowest levels of both understanding and confidence across almost every financial topic. Over half (56%) of 18-24 year olds said they don’t understand pension planning, while 55% said they aren’t confident in choosing the right ISA.

This lack of financial confidence appears to be having wider effects on wellbeing. 51% of 25-34 year olds said they struggle to manage their finances amidst rising costs, and almost half (46%) said financial worries have caused them to lose sleep. A further 55% said money concerns have negatively affected their mental health.

The findings suggest that the absence of financial education earlier in life is leaving younger adults ill-equipped to manage their money and plan for the future.

Brits call for personal finance to be taught in schools

Seven in ten Brits (70%) believe personal finance should be part of the school curriculum, with 72% saying lessons should focus on practical skills such as how to save and invest.

A lack of financial understanding may also be preventing people from preparing for emergencies or achieving their long-term goals. Around half (54%) of Brits said they regularly review their financial progress, while just three in 10 (34%) feel confident they’ll reach their financial goals.

Experts warn that without improved access to financial education and advice, many people risk falling further behind in their financial wellbeing.

Derence Lee, Chief Finance Officer, at Shepherds Friendly says:

“Our survey showed that many people feel unsure about different areas of personal finance, from investing to insurance. But understanding key financial topics and the products that can help plan for the future is essential for feeling confident when making decisions about your money. Improving financial literacy can benefit everyone, whether you’re just starting out or already thinking about retirement.

“There’s plenty you can do to build your money skills. Even small steps, like exploring online learning tools, using budgeting apps, or reading trusted resources, can make a real difference. For those who feel unsure where to start, speaking to a qualified financial adviser can help turn confusion into clarity.

“There’s also a responsibility on providers of financial products to make their offerings easy to understand. At Shepherds Friendly, we aim to be a jargon-free zone, helping people learn about our products and personal finance topics so they can make informed choices. By improving financial knowledge, we can all make smarter decisions, feel more confident, and build a stronger financial future for ourselves and our families.”

Methodology:

Findings based on a survey of 2,001 Brits aged 18+ conducted between 03/09/2025 and 08/09/2025.

The pass rate of the quiz was calculated by finding the percentage of respondents who got half or more of the quiz questions on ISAs, investing, income protection, insurance and personal finance correct.

Please note that year-on-year comparisons of the Money Literacy Quiz pass rate have been made in this blog post (from 2023, 2024 and 2025), however the quiz questions are not identical year-on-year. The aim is to measure overall financial literacy rather than exact question-level comparability.