Sunday 4 December 2016

Text speak 'more widely understood' than basic financial terminology - study

Published 16/09/2015 | 12:04

Four in five people know that LOL means
Four in five people know that LOL means "Laugh out loud", while fewer people - three in five - know that Isa stands for Individual Savings Account, research showed

Britons are more likely to understand text message jargon such as LOL and OMG than they are to know what financial abbreviations like PAYE, ATM and Isa stand for, a survey has found.

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Four in five (79%) adults knew that LOL means "Laugh out loud" in text speak, while three in five (60%) knew that Isa stands for Individual Savings Account, according to Nationwide Building Society research.

More than three-quarters (77%) of consumers knew that OMG translated as "Oh my God" in text language, while just under two-thirds (65%) knew that ATM stands for Automated Teller Machine.

A similar proportion (66%) of people correctly said that PAYE means Pay As You Earn.

The survey also found that more people knew what WTF ("What the f***") means in text shorthand, with 63% getting the answer correct, than those who knew what abbreviations such as HMRC (Her Majesty's Revenue and Customs) and CTF (Child Trust Fund) stand for.

One in 20 people correctly said that CTF stands for Child Trust Fund.

Less that one in five (17%) people surveyed knew that LTV stands for loan-to-value, in relation to mortgage borrowing.

Even APR (Annual Percentage Rate) - a term widely used in the financial world to indicate to consumers how expensive it will be for them to borrow money - was understood by just over half (53%) of those surveyed.

Just over one-third (36%) of the 2,000 people surveyed knew that AER, a term used to help people compare savings accounts, stands for Annual Equivalent Rate.

Andrew Baddeley-Chappell, Nationwide's head of mortgage and savings policy, said: "Organisations such as banks, building societies, insurers have been using abbreviations for many years, but it's alarming to see that people still don't have a grasp of the basic financial terminology.

"In fact, according to our latest research, text speak is more widely understood, with people likely to know an LOL rather than an LTV.

"It's important for people to take some time and understand all the acronyms when applying for products, such as a mortgage, savings account or credit card.

"After all, a lack of understanding of text speak is not going to cost you financially, but not knowing financial terms will."

Nationwide has guides on its website - www.nationwide.co.uk/guides - to help people decipher financial jargon.

Here are the top five text terms that people understood in the survey for Nationwide, followed by the percentages of people who got the right answer:

1. LOL (Laugh out loud), 79%

2. OMG (Oh my God), 77%

3. 2moro (tomorrow), 67%

4. WTF (What the f***), 63%

5. BTW (By the way), 54%

And here are the top five financial terms where people knew what the abbreviations stand for, followed by the percentages of people who got the right answer:

1. PAYE (Pay As You Earn), 66%

2. ATM (Automated Teller Machine), 65%

3. HMRC (Her Majesty's Revenue and Customs), 62%

4. Isa (Individual Savings Account), 60%

5. Bacs (Bankers' Automated Clearing Services), 60%

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