4th July 2014
As home of the nation’s financial centre, and the most expensive place to live in the country, it may come as no surprise that Londoners are the savviest with their cash.
A ‘savvy city index’ launched by GoCompare.com saw residents of 15 cities across the country asked 10 financial questions including how often they review their finances, whether they shop around for a deal, and what the current base rate is to determine just how ‘savvy’ they were about money.
London beat Edinburgh into second place as the savviest city, while Nottingham came in third. Sheffield came in bottom of the leaderboard.
While most people around the country scored highly when asked about their day-to-day finances they were less knowledgeable about broader financial topics.
The large majority, 78%, of people managed their money online and 75% of people always shop around for the best deal. The majority of Britons also keep their account in credit or at least within their overdraft – with 68% stating they were in the black.
Londoners were mostly likely to have rainy day savings and keep their bank accounts in credit. Sheffield had the lowest amount of people with savings and those in Manchester were least likely to stay within their credit limit or keep their accounts out of the red.
However, just 29% have some money saved for a rainy day and less than half (40%) review their finances at least once a year.
Just half of people knew the governor of the Bank of England was Mark Carney and even fewer, 46%, knew the bank base rate was 0.5% despite sitting at that level for over five years.
Those in Edinburgh were most likely to get the interest rate right but Liverpudlians struggled the most.
The lack of knowledge about Carney and interest rates is understandable as just 20% of people read the financial sections.
Claire Peate at Gocompare.com said: ‘The Scots have a reputation for being careful with their cash but our new research shows that London is the savviest UK city,’ she said. ‘When it comes to managing their money and keeping up with personal finance issues Londoners lead the field although, to be fair, Edinburgh was not that far behind.’
She added that while it was great the consumers were shopping around for the best deals and embracing technology to manage their money, more people needed to review their finances.
‘It would also be good to see the number of people who review their finances at least once a year pushing up,’ she said. ‘There are many product we should review regularly to ensure we’re still getting the best deal including car insurance, home insurance, energy tariff, savings rates and mortgage interest rates.’