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3 quintessentially British finance faux pas

Sarah Finney 23 April 2014

Stereotypically, we Brits are known for our fondness for queuing, our stiff upper lip, a shared love of irony, and our affinities with the Royal Family and 'the underdog'. We love nothing better than discussing the weather and solving our problems with copious doses of tea. If popular fallacies are to be believed, we’re a nation of grumbling, overly-polite, self-deprecating Doctor Who fans.

But do you live up to the British stereotype when it comes to financial matters?

Here are some quintessentially British traits when it comes to managing our money. Perhaps you recognise them?

"Money talks" – but no one talks about it

A survey in 2011 found that money matters, such as salary and pensions, are the subject Brits least like to talk about – even ranking above topics such as death and being overweight. Almost two-thirds of those surveyed by Scottish Widows said that they would be uncomfortable talking about money with their friends or colleagues. Many of us are unlikely to share recommendations for money management or financial products as a result.

Because most of us don't want to open up about our finances with colleagues or friends, we either put off financial decisions indefinitely or take the route of sharing our financial decisions with a trusted financial adviser. If you're a MoneyHub user, you can access financial advice at the click of a mouse (bear in mind that in both cases, advisers may charge for their services).

Another study recently found that 1.18million of us have a secret credit card stashed away. According to research by Debenhams Personal Finance, women use it to buy clothes and shoes; men tend to buy gadgets. Of those surveyed, 59% fudge the issue with their partners, and 29% play down the cost of their purchases to their parents. But only 9% of Brits suspected their partner of secret spending. So while we like to secretly spend, we're also very trusting, apparently.

If money is a taboo subject among friends and colleagues, it seems to be no easier among couples. Money is a huge factor in the breakdown of relationships, according to numerous pieces of research. A recent study found than 1 in 7 divorced or separated couples had stayed together for longer because of financial implications, and 52% of women said that surviving financially after the break-up was a worry. Around 58% of single people said that arguing over finances had played a part in the breakdown of their last relationship. With so much heartache over salary or spending inequalities, it might be worth considering independent financial advice for any big money decisions you have looming (bear in mind that advisers may charge for their services). Equally, if you're breaking up, as well as getting legal advice, you may also want to get financial advice for what the split will mean for your finances.

Sticking with our traditions

Cooper's Hill near Gloucester is the scene of an annual cheese rolling competition. If you've never seen it, an 8-pound wheel of Double Gloucester cheese is bowled down a very steep, wet and muddy hill as hordes of competitors give chase; the first one to catch the cheese wins it. No one really knows why this happens. Typically accompanied by a litany of broken bones and other injuries, it is a truly eccentric tradition not for the faint hearted.

And it illustrates a second quintessentially British trait: if we've always done it, we probably never seriously question it.

In financial services, sticking to our traditions is almost always a mistake. Banks and service providers rely on the inertia of millions of customers to supply the bulk of their profits, while providing offers to those savvy shoppers who actively seek the best deals. A case in point: since it launched last year, barely 1.5% of over 50 million UK current account holders have made use of the faster Current Account Switching Service. This is despite the increasingly competitive deals available to those switching to save.

If you've always used a balance book or spreadsheet to work out your outgoings and budget, you might find it easier to use an app like MoneyHub to organise all of your money. MoneyHub gives you an all-round view of your savings, investments, debt, assets, everyday spending, and more, in quick snapshots. There's the power to make complex calculations to model differences in your financial future with a couple of mouse clicks, and the simplicity to track your everyday spending as well.

Passiveness: so passé…

Much of the unspoken British social code is based on subtle gestures: nods, half-smiles, and small movements. Not for us the expansive body language of some other cultures. Often, this British reserve can be interpreted as a lack of assertiveness.

And even if that's not quite a true reflection of British national character, we do tend towards the passive approach to managing our money. For example, although the City of London is home to a thriving investment management industry, the British public lags behind the American example when it comes to building our own investment portfolios. We're far more likely to leave money in the bank, or slowly accumulating in a pension fund, and hope things work out for the best.

The good news? It's never been a better time to assert control over your financial affairs. A combination of factors, including growth in web-based information and app technology, the emergence of DIY investment platforms, and gradually increasing openness in the financial services industry, is putting more choice in our hands. Increasingly, British consumers are standing up and taking note.

Take control and don't be afraid to ask questions: it's your money, so it's your choice how you manage it.

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