Brits issued £641 tax warning – ‘prevent this costly mistake’ | Personal Finance | Finance

Brits are being warned they could be losing more than £600 a year because they feel too overwhelmed to make key financial decisions. New research shows that a lack of confidence and financial knowledge is quietly draining household budgets, with experts calling the losses a “confusion tax”.

The findings come from the launch of Money Ready’s new Cost of Not Knowing campaign. The financial education charity, previously known as MyBnk, surveyed 3,000 adults and found that many people are avoiding choices on savings, bills, insurance, pensions and loans simply because they don’t know where to begin.

Money Ready says the impact is far bigger than many realise. Its research found that people lost an average of £641 over the past year because they put off major financial decisions.

The charity warns this can build into a huge long-term loss. According to the study, the same mistakes could cost more than £3,000 in five years, £6,000 in a decade and over £18,000 across several decades.

Leon Ward, the CEO of Money Ready, said financial literacy affects daily life in ways many people underestimate.

He added: “We rely on financial literacy every day, often without realising it. Yet too often, people aren’t taught how the system works.

“Early and consistent teaching throughout key life stages doesn’t just prevent costly mistakes, it empowers people to build healthy habits, make confident choices, and strengthen their long-term stability.”

He also stressed that the consequences go far beyond missed savings. Mr Ward said: “This issue is not a personal one, but a systemic one.

“You learn to drive before getting on the motorway. The same should be the case with finances. Whether it’s something small like a voucher expiring or something life changing like choosing a mortgage, the consequences are huge for individuals and for the whole country.”

He added: “Better education and a fairer system would give Brits more confidence, control, and spending power, which is good for them, and good for our economy.”

The survey showed just how widespread the problem is. According to the data:

• 28% left money in low- or no-interest savings accounts, losing an average of £342
• 22% stayed with providers they believed were expensive, costing £331
• 20% paid for unused subscriptions or free trials, losing £213
• 19% let vouchers or loyalty rewards expire, costing £195
• 18% paid more than needed for contracts or rent, losing £427
• 18% missed a bill or repayment, paying £265 in fees or interest
• 17% failed to claim discounts or benefits they were entitled to, losing £372
• 15% did not use employer pension contributions or tax-free savings, losing £566
• 15% delayed a major financial decision, such as a mortgage or loan, which cost £641 on average

Money Ready said this last group is especially vulnerable. One in six adults admitted delaying big decisions because it felt too confusing, rising to 22% among people aged 25 to 44.

The charity warns that the cost of confusion is rising at a time when households are already under pressure.

Many people are missing out on between £200 and £400 per decision, and almost one in five said they had lost more than £1,000 in the last year alone.

Money Ready’s campaign calls for better financial education throughout life, arguing that clearer guidance would help people avoid unnecessary losses and make confident, informed choices.