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Stroud & Swindon says homebuyers afflicted by 'low IQ'

25 April 2007
Prospective housebuyers in the UK too often make ill-informed decisions because of their "low financial IQ", a study from Stroud & Swindon Building Society claims.

After setting a test for consumers which challenged them to separate out the names of real mortgage products from invented ones, the study found that 70 per cent of people denied that a 'current account mortgage' was a genuine product.

Meanwhile, 31 per cent of men and 28 per cent of women thought a 'base rate mortgage' described an actual product, which it does not.

Stamp duty meanwhile remained a particularly puzzling subject, with four in ten housebuyers apparently unaware that it was their own responsibility to pay the tax.

It is "worrying" to see that many Britons have "a relatively low financial IQ", commented Stroud & Swindon's sales and marketing director Paul Chafer.

"Understanding basic personal finances is key to consumers making the most of their income and, ultimately, avoiding significant debt problems," he added.

But most personal finance commentators stress that misunderstandings about money are not a matter of IQ or innate intelligence.

Instead, they depend on the quality and quantity of clear and independent information available to consumers about how to manage their money.

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