Just 32% feel confident about managing their money Most people never received any financial education in school Upcoming Advice Guidance Boundary Review could be 'revolutionary' 

Two thirds of Britons are £65,000 worse off on average over the course of their life due to low financial confidence and knowledge, a study claims.

Only 32 per cent feel confident when it comes to managing their money, new figures from digital wealth manager Moneybox suggest.

Additionally, 64 per cent believe they have missed out on financial opportunities in life due to their lack of money knowledge and confidence.

Worse off: Two thirds of UK adults are £65,000 worse off on average due to lo

If these people were better supported to make financial decisions with greater confidence, Moneybox suggests this could equate to a potential £2trillion of spending power to the UK economy.

The research reveals that people who are more financially confident have a higher net worth, even when adjusting for income, to the tune of £84,000.

What's behind it?

Most people in Britain have never received financial education in school so they have been left to figure out how to manage their finances and plan for the future through a process of trial and error, unless they can afford regulated financial advice.

It has created a financial confidence gap which means many people are missing out on being able to grow their money over the long term in the best way for their circumstances.

Data shows that financially confident people save and invest more money, more consistently.

For example, 70 per cent who consider themselves confident are saving monthly, and make up 96 per cent of monthly savers. They put away £129 more per month than those without confidence.

They are also investing 68 per cent more per month than those that lack confidence, at an average of £1,300 more per year.

This financial confidence gap has a huge impact on wealth in the UK.

The average net worth across those who have low levels of financial confidence sits £58,000 behind those that feel more confident (£114,000 compared to £172,000), which amounts to a gap of £1.3trillion across the UK.

This gap grows even more for people who have no confidence at all, with the rift stretching to £84,000 behind that of a UK adult with any level of confidence (£60,000 compared to £143,000).

While friends and family are most often credited as where people learned how to manage their money and plan for the future, those who rely solely on personal relationships to guide them in financial matters were found to be almost 30 per cent worse off financially than the average.

New research from Lloyds Bank shows that the main financial role model for younger people between the ages of 18 to 25 is a parent, as 42 per cent turn to their parents for help with money.

A third of this group are put off investing by not feeling they know enough to get started.

Plugging the £2trillion gap

The FCA and the Treasury have been working on proposals to bridge the advice gap in the form of the Advice Guidance Boundary Review.

The proposal the FCA and industry groups are most interested in is the targeted support proposal - a new approach which would allow firms to provide support tailored to groups of people in similar circumstances.

It would allow firms to use limited data they have on people to suggest products or courses of action.

A person could be identified as belonging to a target market and the firm could suggest options on the basis of 'people like you.'

For example, a customer holding a sum of money in their bank account which meets the firms definition of excess cash.

The firm could highlight that their money would be better placed to beat inflation if it were invested and suggest products which align with the customers needs.

Exactly what data would be used to establish what 'people like you' means has not been established yet.

A policy paper detailing the proposals was published in December and the FCA is inviting responses to the paper before 28 February.

Brian Byrnes, head of personal finance at Moneybox, says: 'Most probably haven't heard of the upcoming Advice Guidance Boundary Review, but it could be revolutionary for consumer finances.

'It represents a pivotal moment; the financial ecosystem in the UK has the collective opportunity to overhaul how the British public is supported in navigating the complexities of personal finances, filtering the streams of information available to them, cutting out the unhelpful noise, and helping people make financial decisions with more confidence.