Money is something that people have to deal with nearly everyday, yet millions of Britons continue to struggle when managing their finances.

The latest research from online bank Egg has discovered that this could be the result of them having a low Financial IQ or FIQ.

Egg worked with Professor Alan Lewis, economic psychologist at Bath University, to compile a test to measure the level of financial understanding amongst UK adult consumers. The test covers basic economic knowledge, comprehension of financial information and psychological reactions towards money. The test was then used to assess the nation’s competency levels in everyday money matters and decisions.

Egg discovered that the overall level of financial comprehension in the UK is very low. The average score amongst the population was 56 out of a possible 120. Surprisingly only 1% of the population achieved the highest possible score of 120 and 3% scored 0.

Females, younger and older age groups, were likely to score lower with females having an average FIQ of 52 compared to men 60. And the most financially competent age group was the 35-44 year olds with an average FIQ of 62.

One of the things that is letting the nation down is basic economic knowledge. When asked how the government raises money over half of the respondents (54%) thought that the government’s main source of funding for services such as education and the NHS was income tax. Only 18% were aware that they raise approximately equal amounts from both income tax and tax on goods and services.

Comprehension of financial information was another problem for respondents for example it is not the abbreviation of APR that causes confusion amongst consumers, it is how it’s applied. In fact 83% selected the correct answer when presented with four possible options.

However, in a further study by Professor Lewis, when ask to apply an interest rate most people made the assumption that an APR of 8% would mean that 8% is taken from the loan amount and simply added on, in fact nearly half of those questioned (44%) thought this to be the case.

The same with inflation; whilst two thirds (64%) correctly identified the definition of the word, nearly three quarters thought it better not to spend when faced with an inflation rate of 4% and an interest rate on their savings of 3%.

And psychologically there is a real sense of immediacy amongst consumers; they want money now not later. People would rather take £50 in the near future than £100 later, reflecting a perceived inflation rate of approximately 200%. This short-sightedness affects even people who are otherwise financially sophisticated.

Regionally it appears that the most financially competent live in the East Midlands, here the average FIQ is 68, beating the national average. Those in the East of England came bottom of the table with 46.

Egg also tested the financial competency levels of five different professions: hairdressers; doctors; accountants; estate agents and teachers. Overall this group scored higher than the national average, 82. Hairdressers scored below the other professions in all questions however they still achieve an average FIQ of 61.

Accountants, doctors, estate agents and teachers are usually above the national average in all questions but perhaps not surprisingly accountants have the highest FIQ of all, 99. More surprising is that the supposedly financially savvy accountants do not score 100% in any one question, more often than not they are 90% correct.

Professor Alan Lewis said: "I was surprised by how low financial competency is in the UK today. On this evidence I am worried that many people could be making the wrong financial decisions, especially when arranging credit or paying off loans appropriately."

"Many people also suffer from financial short-sightedness: there is evidence from this study that young people are the most financially impetuous."