17 September 2015

Do you know your APR from your BTW?

We’ve recently conducted research that shows that Brits have a greater understanding of text speak than financial jargon.


  • Majority can decipher terms like LOL, BTW and LMAO but few know what LTV, IHT and ERC mean.
  • Many risk their finances by ‘nodding along’ during financial meetings because they're afraid of ‘looking stupid'.
  • As a result 1 in 10 have ended up in difficulty because they didn’t understand financial acronyms.

R u ne gd @ txt spk? Those who understood that, but have no idea what LTV, AER or ERC mean, may be in need of some Finance-LOL literacy education.

A new poll¹ we recently published shows that British adults find it easier to decipher text-speak than they do the terminology used in finance. The knock-on effect is that 1 in 10 (14%) have ended up in difficulty because they weren’t clear on financial acronyms. 

The majority understand the meaning of terms such as LOL (79%), BTW (54%) and even LMAO (50%), while they don't when it comes to terms they will have come across in personal finance, such as LTV (17%) and AER (36%). Even the widely used APR (Annual Percentage Rate) is understood by just 53%

Lack of knowledge

This uncertainty with financial jargon, or over-complication, isn’t a comical matter. Over a third of Britons (37%) admit to ‘nodding along’ when in a financial meeting because they didn’t understand what was being said – on the most part because they didn’t want to look stupid (67%). A fifth (17%) also say there's “no need to understand the terminology”.

People in Northern Ireland are the most likely to go along with financial conversations they don’t understand, while those in the East Midlands are the most likely to put a stop to a conversation when they’re not familiar with the terms being used.

Perhaps unsurprisingly, it’s those on low to middle incomes (up to £25,000) who are most likely to have suffered difficulty (15%) because they weren’t clear on financial acronyms – and the issue is far more prevalent among young people (18 -24) (23%).

Andrew Baddeley-Chappell (ABC), Head of Mortgage and Savings Policy, said: “Organisations such as banks, building societies and 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 a LOL rather than a LTV.”

Is txt spk taking over?

  • Unsurprisingly, young people (18 – 24) use text speak the most. More than half use it with friends and more than 2 in 5 use it with their parents.
  • Even the over 55s are not exempt, 15% use it with their friends.
  • The most recognised term is LOL (79%), although for younger generations it is BRB (80%).
  • More than 70% of over 55s understand what OMG means.

Need help?

If you'd like to refresh your knowledge of financial acronyms and terminology, take a look at the Nationwide Financial Glossary – a useful resource when dealing with your money.

1 Research carried out online by OnePoll between 28th July and 14th August 2015, using a sample size of 2,000 adults aged 18.

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