Loqbox Report Finds One-Third of UK Consumers Struggle to Understand Credit Terms
Photo Credit: Loqbox
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BRISTOL, United Kingdom, July 15, 2025 (VSNewsNetwork.com) — Financial technology company, Loqbox, has released a new report revealing that one-third of UK consumers do not fully understand the terms of their credit agreements, with the lowest levels of financial literacy reported among people aged 18 to 24.
Read the report: How to borrow money: The UK's shifting attitudes on credit
The report, titled How to Borrow Money, was based on a survey conducted with Censuswide, gathering responses from 1,000 UK adults across age groups, income levels, and regions including Scotland, Wales, and Northern Ireland. It offers a detailed breakdown of how UK residents borrow and manage credit, including usage trends, awareness of financial terms, and decision-making habits.
The report shows that 31% of respondents borrowed money in the past year, with 49% using credit cards, 35% using personal loans, and 18% opting for Buy Now Pay Later (BNPL) services. BNPL was most popular among individuals aged 45–54, followed by those aged 18–24. The data also showed women were more likely to use credit cards, while men were more likely to use BNPL and to borrow amounts exceeding £6,000.
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The survey results highlighted several areas of concern regarding consumer financial literacy:
33% of respondents said they do not understand key credit terms such as “annual percentage rate (APR),” “variable rate,” and “default.”
69% reported they do not know what APR means.
Only 14% said they always read the fine print when borrowing.
Only 25% consistently consider long-term affordability, with women more likely than men to do so.
"Credit is used responsibly by millions of people across the UK. It’s often provided by reputable lenders and serves as a flexible means of managing finances for people at all income levels. The ongoing popularity of credit is down to one simple truth — people just want more choice and flexibility in how they pay for things. But with this demand comes the responsibility to ensure that people fully understand what they’re signing up for. Financial education is key to responsible borrowing. It’s crucial that people take the time to fully understand the terms of their credit agreements and ensure that it is affordable for them. That’s why financial education is critical and why at Loqbox we’re passionate about empowering people with the tools and knowledge to navigate the complexities of today’s financial world with confidence," said Tom Eyre, Co-Founder and CEO of Loqbox.
Read the full report here.
For more information, visit www.loqbox.com.
Source: Loqbox
