People who rely solely on financial advice from family and friends are on average £42,000 worse off regardless of income, research by Moneybox has found.

The app-based personal wealth firm said that those who are proactive in seeking advice and guidance from multiple sources were found to be better off.

Analysis by Moneybox has revealed that 29% of Brits learned how to manage their finances and plan for the future through their parents, while a further 11% rely on their friends for advice.

The firm said that with many family members and friends receiving similar levels of financial education, this could lead to bad advice being passed on, impacting overall financial health and future prospects.

Head of personal finance at Moneybox, Brian Byrnes, said: "Financial education, both in school and in later life, has been severely lacking in the UK which means that most people have been left to figure out how to manage their money and plan for the future through trial and error."

“While it’s completely natural to turn to those we are closest to when we need advice or support, the truth is, not all knowledge is equal. Remember that if you rely solely on friends and family for financial advice, you may be taking on board advice that is outdated or misinformed, as they themselves may have followed a similar path due to the lack of financial education on offer. This can easily lead to missed opportunities and financial mistakes being made."

Analysis found that 47% of Brits have learned via freely available financial information online, which includes personal finance websites, articles and content creators.

Those using paid financial advisers, despite being just 8% of the UK population, had a higher net worth (around £68,000 more) than those who didn’t, regardless of their income.

However, those who used multiple sources, spanning everything from online resources to family and paid financial advisers, benefited the most.

Moneybox said this showcases just how important it is for people to be engaged with their finances whether than means taking the time to learn, keeping up to date on any industry news and market changes, or speaking openly about personal finance topics.

Byrnes added: "Financial advice remains quite inaccessible right now but there are many other freely available expert sources of financial information that can be invaluable in helping boost knowledge and build financial confidence. And as our findings prove, the more sources of financial information you engage with, the better off you could be.

"Looking to the future, it's imperative that the industry does more to close the financial advice gap."

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