Financial expert answers the nation's common money queries

Wednesday 22nd February 2023

Man's finger clicking a laptop keyboard
  • Personal finance company reveal most Googled financial queries
  • Inflation and savings are top of the nation’s mind
  • Interest in inflation rises in line with concerns regarding the cost-of-living crisis

With the cost-of-living crisis still dominating the headlines and the March budget announcement on the horizon (15th March), money is very much on the nation’s mind.

As research by Novuna Personal Finance has found, Brits are looking online to answer their financial queries and increase their financial knowledge.

Searches asking ‘what is the current inflation rate’ are up +79% year-on-year, while there has been a 56% rise in searches for ‘money saving tips’. It seems that now more than ever people are exploring the best ways to manage their finances.

Furthermore, searches for ‘personal loans’ and ‘how to get a loan’ have increased by +28% and +26%, showing that personal financial guidance is increasingly in demand.

To help clear up any confusion, the experts at Novuna Personal Finance have answered 5 of the most pressing financial queries the nation has been asking so far in 2023.

  1. What is inflation?

Inflation has been discussed a lot in the news in recent months, so it’s no wonder this is one of the most popular financial queries already this year.

In a nutshell, inflation measures how the cost of goods and services have changed over time. It is often determined by looking at the price of products today versus how much they cost a year ago.

For instance, if inflation is at 10%, a bar of chocolate bar that cost £1 a year ago might be expected to rise to £1.10. Life’s little luxuries are costing more than ever, with research suggesting popular sweets and chocolates have increased by over 150% in the last two decades.

Encouragingly, despite inflation rate rising rapidly throughout 2022, it has already slowed slightly and many economists expect that will continue throughout 2023.

  1. How to save money?

Inflation has affected us all. With wages failing to keep up with rising costs, it makes sense that Brits want to know how to save the money they do have, to avoid falling behind.

Simply wanting to ‘save money’, however, is more than a bullet point on a to-do list: it takes a lot of consideration. The best route to saving money effectively is to have a three-point plan.

Firstly, track your spending. This way you know exactly how much is going out and you can hold yourself accountable for all your finances. Most banking apps allow you to see all regular payments and income, so check this regularly. There are plenty of budgeting apps available that can help you track what you are spending your money on too.

Next, search around for a better deal when it comes to renewal time for your insurance policies, such as your car or home insurance. If your current insurance provider can’t offer a discount, don’t be afraid to search for a policy that better suits your needs and your budget. You may be able to get a better deal elsewhere as a new customer. Make sure you give yourself plenty of time to compare prices, however, so you don’t leave yourself uninsured.

It's also worth checking to see if there are any add-on packages included with your current account, such as motor recovery and travel insurance, to make sure you’re not paying more for something you already have.

Finally, see where you can cut back. There’s nothing wrong with treating yourself, but there are often many purchases we habitually make without considering the cost. For instance, do you need that takeaway, or would a home-cooked meal do fine? Did you remember to browse the Reduced aisle in the supermarket last week? You’ll be surprised how quickly you can start to make savings.

  1. What is APR?

If you have taken out a new loan or own a credit card, then you’ve probably asked this question.

Simply put, APR stands for ‘Annual Percentage Rate’. It is there to give borrowers a clear understanding of the price of a loan, so they can compare prices across different lenders.

APR includes the interest rate and any additional fees associated with borrowing money. Some personal loan providers don’t charge additional fees, so in this instance the APR and interest rate would be the same.

  1. What is interest rate?

Interest rate and APR go hand-in-hand as interest rates are included in an APR calculation.

Interest rate looks exclusively at the amount you will be charged for borrowing money, usually as a percentage of the total borrowed amount. If there are no additional fees, then the interest rate is the same as the APR on a loan.

They also differ depending on the type of loan you have. For instance, if you take out a mortgage, interest rates can be fixed (one set rate for a specific time period) or variable (which means they can change at any point during your contract).

Credit card interest rates are likely to be variable, though you should always keep an eye on when you need to pay off the minimum balance to make sure you don’t get charged a higher rate. For a personal loan, interest rates are usually fixed.

Fixed interest rates are ideal for those who are looking to better manage their monthly outgoings as the repayment amount will be the same every month, while variable rates can go up or down depending on the state of the economy.

  1. What is an unsecured loan?

Unsecured loans are often just another way of saying ‘personal loans’.

Unsecured (or personal) loan providers make a lending decision based on your personal circumstances, credit history, loan term, as this enables them to access how likely you are to be able to repay what you owe.

A secured loan, on the other hand, is pledged against a valuable asset, such as a house or car. The loan is secured against your assets. A mortgage, for instance, is a secured loan as the property is used as collateral to secure the debt.

It’s also important to understand what will happen if you miss making a repayment. For both unsecured and secured loans, a missed payment will show on your credit record and this will impact your credit score. This could make it more costly and potentially more difficult for you to borrow money in the future. For a secured loan, your lender could also repossess the asset you bought.

Gillian Brooks, Head of Personal Lending at Novuna Personal Finance, explains why it is a positive sign that Brits are looking more frequently for financial answers:

“It is encouraging to see people more engaged with the financial space, especially given the economic uncertainties currently facing us all.

“Savings and budgeting questions, in particular, are reassuring as this shows people are looking to carefully manage their money, rather than living beyond their means and worrying about the consequences later.

“It’s also not a surprise to see loan queries featuring so frequently. Opting for a personal loan is a considered way to pay for those bigger costs in life, such as a new car or home improvements, or even to consolidate current loans into one more manageable monthly repayment.”