Tax refund app, Tommys Tax, has revealed that 60 per cent of people choose social media as the primary source to receive financial advice, according to its latest study.
Times are changing. With #TaxTok receiving over 367 million views on TikTok, it is clear that younger people trust social media platforms when looking for financial advice. The likes of Erika Kullberg, who has amassed nine million followers and hundreds of millions of views, highlight this phenomenon.
Research by Tommys Tax further shows how younger users are turning to social media during the cost-of-living crisis. The tax app reveals that 43 per cent of British people aged 25 to 34 believe tax to be the life topic they understand least. Meanwhile, a lesser 35 per cent of those aged 18 to 24 stated that they do not understand tax.
According to a GoCardless study, 85 per cent of all British adults surveyed stated that the UK education system should teach people more about managing their money. Tommys Tax suggests that this highlights how social media can offer understanding for many, providing easy-to-understand videos on complicated topics.
Research from the tax refund app also highlights that 47 per cent of British Pay As You Earn (PAYE) workers aged 25 to 34 do not know where to begin getting a tax refund. However, this figure lowered to 36 per cent for those aged 18 to 24. This exemplifies how social media may be providing information to younger consumers, increasing financial confidence.
Fifty-four per cent of Brits aged 25 to 34 did not know when the Making Tax Digital deadline is. Following the trend, the proportion lowered to 42 per cent for those aged 18 to 24. The stats potentially show that younger people feel more confident about their financial knowledge than those around ten years their senior.
Tax refunds could ease financial trouble
Tommy Mcnally, CEO of Tommys Tax, gave his view on the findings. Mcnally said: “The findings of our research may come as a surprise to many, but it seems that the younger generations, Gen Z in particular, claim to be [savvier] when it comes to personal tax than their older counterparts. This could be in large part down to the fact that financial education is so much more accessible these days. Social media trends such as ‘Tax Tok’ are becoming more and more common and presenting these things in an easily digestible way.
“In general, people across the UK will be looking at tax refunds as a means to cope with the cost-of-living crisis, and for a majority, this could inject a much-needed boost into their bank accounts. However, our research shows that across the board there is still an obvious lack of knowledge when it comes to the process, which is worrying given that the average tax refund for a PAYE worker stands at a staggering £1,518.
“With so many unregistered agents out there, as well as the current delays we’re currently experiencing with HMRC, I’m sure that many people are wondering whether they’ll be able to claim their rebates back in time. That is why we’re here to help with the entire process for workers across the country.”