Why financial empowerment is the UK’s next great economic opportunity

Ask a 22-year-old and a 70-year-old in the UK today whether they use digital tools to manage their money, and the answer is increasingly the same: yes. Ask them whether they feel confident doing so, and you get two very different answers. Financial empowerment is the term we use to refer to the knowledge, skills, tools and opportunities that allow an individual to take control of their financial life and improve their financial wellbeing over time. Britain increasingly banks, budgets and borrows online — a shift made possible at scale by advances in digital technology and the data and analytics behind it. But how confident people feel doing it is the real story of financial empowerment in Britain right now, and it offers valuable insight for policymakers and industry alike. Different lives, shared financial ambitions For a decade, Lloyds Banking Group’s Consumer Digital Index has tracked how people across the UK engage with digital technology and the confidence they have in doing so. Its analysis shows that more than 75 percent of 18- to 24-year-olds have used artificial intelligence (AI) for personal finance in the past year — the highest adoption of any generation. Yet they’re also the least confident using the tools they’ve adopted: just 64 percent of 18- to 24-year-old digital tool users feel confident using them, rising steadily to 85 percent among 65- to 74-year-olds. Britain increasingly banks, budgets and borrows online — a shift made possible at scale by advances in digital technology and the data and analytics behind it. Look across the UK and the picture shifts again. According to the index, London is the UK’s AI finance capital — 49 percent of digitally engaged respondents use it weekly, reporting the nation’s highest average savings of £562 after following AI-powered recommendations.* Yet Londoners who use digital tools feel less confident doing so than anyone else in the country. Wales leads the UK on financial engagement and knowledge — how actively people manage their finances and how well they understand them — with the highest proportion nationally of those surveyed saying digital tools have helped them grow their pensions and investments. Yorkshire and the Humber leads on digital budgeting, and Northern Ireland shows some of the lowest adoption alongside some of the strongest outcomes among those who do engage.** How people use digital tools to manage their money across the UK is as varied as the lives, places and ambitions behind it. These insights insist that financial empowerment should be a national priority. While people across different generations and in different places are engaging with digital money tools differently, the ambition is the same — to have confidence, capability and control over their financial future. It can’t be enabled in the same ways to everyone. A 20-year-old in Croydon, a 45-year-old in Leeds juggling debt and family costs, and a 70-year-old in Cardiff drawing down a pension will need different things to feel confident in managing their money online. While people across different generations and in different places are engaging with digital money tools differently, the ambition is the same — to have confidence, capability and control over their financial future. But strip away the age and the postcode, and what people want is remarkably consistent: the confidence to decide, the capability to act, and the control to plan ahead without being derailed by the next bill. That’s the common connection between a Gen Z Londoner testing an AI budgeting tool and a Boomer in Edinburgh checking her pension pot on an app before bed. Financial access is only the starting point The UK has made big steps toward building digital access — nearly nine in ten digital tool users across the UK (88 percent) now manage their money online weekly. That’s a real achievement, but access was never the finish line and cannot be taken for granted. A second goal is to turn that access in