From the new state pension to the Financial Services Compensation Scheme and everything in between, the world of personal finance can be a confusing place sometimes.
In January, Which? asked more than 1,000 members of the public to look at a number of statements relating to the financial world and asked them to say if each one was true or false.
So how well will you do? Take our test and discover how well you know the rules which govern our money and separate myths from reality.
This research appears in the May edition of Which? Money. Try Which? Money for two months for £1 to read the latest investigations, as well as expert guidance on savings tax, pensions and more.
The top 10 money myths
Below, we reveal the top 10 money myths that bamboozle the public. From credit and loans, to tax, pensions and scams, we found widespread confusion about a host of different topics. In total 1,059 members of the public took part.
1. There is a credit blacklist
The biggest financial misconception of them all, a whopping 84% of those who took part in our survey believed there is a credit blacklist that bars people from accessing any form of credit.
Find out more about credit reports.
2. Debit cards aren’t protected under the chargeback scheme
Some 63% of the public didn’t think chargeback – a scheme which can help you get your money back if the goods you have bought are faulty, damaged, fail to arrive or the company you are dealing with has gone bust – was available on debit cards.
Find out more about the chargeback scheme.
3. You’ll pay capital gains tax (CGT) on the profit you make when selling your home
An individual selling their only or main home won’t pay CGT on any gain they make from the sale. Only 43% of those we surveyed knew this was the case.
Find out more in our guide to capital gains tax and property.
4. Anyone who retires after April 2016 will flat amount of £159.55 a week
There have been huge changes to the pensions market in recent years and last April, the new single-tier state pension was introduced. Worryingly, more than half (54%) wrongly think that everyone reaching state pension age will receive the headline amount.
But the amount you get depends on your contribution record. Find out more in our guide to the state pension.
5. Your bank is legally required to refund all your money if you’re the victim of a scam
If you are tricked into sending money via a bank transfer to a fraudster, you have no legal right to get your money back from your bank. Some 45% of the public didn’t know this.
Find out what to do if you’ve been the victim of a scam.
6. The Financial Services Compensation Scheme (FSCS) only applies to large high street banks
FSCS coverage applies to any financial institutions which are regulated and authorised by the Financial Conduct Authority – not just the banks that appear on our high streets as 43% thought was the case.
Find out more in our guide to protecting your savings.
7. You can open more than one cash Isa in any tax year
Some 43% of the public thought that you can open more than one cash Isa in any tax year. But this is one of the rules that has remained unchanged since Isas were first introduced in 1999.
Find out more in our guide to cash Isas.
8. If you gift your house to your children, it won’t count towards a potential inheritance tax bill
More than a third (38%) thought they could lower any potential inheritance tax bill by gifting their property to their children. But if you do this but continue to live in it rent free, your property will still be treated as part of your estate.
Find out more in our guide to inheritance tax and property.
9. Putting your home in a trust guarantees you won’t have to sell it to cover care home fees
Our survey found 38% thought this was the case. But if the local authority thinks you have deliberately disposed of an asset to increase your chances of funding for care home fees, it will still be counted in an affordability assessment.
Remember that if you are married and living in your family home, you can’t be forced to sell you property to cover your partner’s fees.
Find out more about paying for care on the Which? Elderly Care site.
10. Regularly checking your credit report has a negative impact on your credit worthiness
If you make a number of credit applications in a short space of time, lenders may view this as you experiencing financial difficulty and reject your application.
But you won’t ever be penalised for checking your credit report as often as you like as 31% of people thought.
Find out more about credit reports.