New research highlights a widening gap in how confident UK adults feel managing everyday finances versus their preparedness for financial shocks, amid broader economic pressures. With consumer confidence at an 11-month low, a nationwide survey of 2,001 UK adults conducted by Shepherds Friendly shows significant financial literacy and well-being challenges.
Financial preparedness concerns
Nearly 4 in 10 adults are not prepared for a financial emergency, and only 60% feel in control of day-to-day financial decisions. Money worries are affecting mental health, with 41% reporting a negative impact, 36% feeling stressed while trying to understand their finances, and 37% losing sleep over money. Rising costs have also made managing finances difficult for 40% of respondents over the past year. Furthermore, 34% lack confidence in achieving their financial goals, and 30% say they have no financial goals at all.
Decline in financial literacy
Financial literacy levels in the UK have dropped in recent years. Only 23% of adults passed Shepherds Friendly’s money literacy test in 2025, down from 49% in 2024 and 27% in 2023. Men were more likely to pass than women, with 29% passing compared with 17% of women. Young adults are struggling the most, with only 9% of 18–24-year-olds achieving a passing score, compared with 34% of those aged 55 and over. Confidence remains particularly low in areas such as investing, ISA saving, and pension planning. Overall, 51% of young adults report struggling to manage their finances.
City-level results
Highest pass rates
- Nottingham: 33%
- Bristol: 30.4%
- Brighton: 28.1%
- Southampton: 28%
- Sheffield: 26.1%
Lowest pass rates
- Leeds: 15.4%
- Belfast: 15.5%
- Cardiff: 15.6%
- Manchester: 19.8%
- Newcastle: 20.3%
Confidence gaps among young adults
Nearly half of UK adults, 48%, do not feel confident investing, and 43% are unsure which ISA suits their goals. Pension planning is also a struggle, with 39% lacking confidence in this area. Among 18–24-year-olds, 56% said they do not understand pension planning, while 55% were unsure about choosing the right ISA. Adults aged 25–34 also report challenges, with 51% struggling to manage finances amid rising costs, 46% losing sleep over money, and 55% saying that money concerns have negatively affected their mental health.
Calls for education and proactive planning
There is strong support for personal finance education, with 70% of adults believing it should be part of school curricula and 72% saying lessons should focus on practical skills such as saving and investing. Despite this, only 54% of adults regularly review their financial progress, and just 34% feel confident they will reach their financial goals.
Commenting on the findings, Derence Lee, Chief Finance Officer at Shepherds Friendly, said: “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.”
The survey links low financial literacy to stress and mental health impacts, particularly among younger adults facing rising costs. Experts emphasise the need for better education and accessible advice to improve financial well-being.