Lives empowered, a nation empowered

As one of the UK’s largest integrated financial services organisations, we wanted to understand the scale of opportunity that comes from true financial empowerment, enabled by digital transformation. So we challenged Professor John Gathergood, Professor of Financial Economics at the University of Nottingham, to explore a specific question: if the benefits of digitally-enabled financial empowerment were realised at scale across the UK population, what could be the total value to the nation over the next decade?

His answer is a striking one. Drawing on published academic research, nationally representative survey data and established economic modelling, Professor Gathergood examines seven areas of everyday personal finance where the evidence is robust and the technology is real or near-term. They are non-exhaustive, provider agnostic and focus on a selection of the most evidence-led ways that digital tools, data and guidance can reduce friction, improve understanding and support better decision making over time.

"Professor John Gathergood’s modelling suggests that accelerating the digital transformation of financial services could unlock up to £100 billion of economic value over the next decade – equivalent to around £3,500 per household."

The research is a high-level projection, and a rigorous attempt to quantify the opportunity in areas where academic evidence and real-world data exists to guide us. The projections are deliberately conservative, the seven areas of focus are independently modelled, and the assumptions are transparent. As with any forward looking analysis, the actual outcomes will depend on the pace of digital adoption, the evolution of the regulatory environment, and the choices that consumers, providers and policymakers make in the years ahead.

A significant opportunity

This report is a scouting mission – a measure of the scale of what becomes possible when digital support reaches everyone who needs it, and a reminder of what is at stake if we get this right. It answers our question with the best available evidence – giving us a clearer sense of what becomes possible as rapidly evolving technology makes digital tools smarter, more personalised and more widely used in daily life.

Access to the right tools, insights and timely support can make people more likely to act – supporting longer‑term planning, more confident debt management, and the development of financial resilience for households and communities, protecting their families and strengthening their communities.

But wide-reaching transformation is never a simple thing. We need to bring together digital innovation, transformative technologies and skilled people to meet the needs of customers more effectively.

Enabling financial empowerment

At Lloyds Banking Group, we recognise the scale of this opportunity. And we are committed to using that opportunity – and the responsibility that comes with it – to enable financial empowerment for our customers.

Any references in this report to Lloyds Banking Group products or services are illustrative only, are provided for context, and do not constitute financial advice or a recommendation.

As a leader in digital transformation, we’re already shaping the future of finance and supporting people to achieve their financial goals, though simple digital tools, personalised insights and timely guidance embedded in everyday banking. For example, our Ready-Made Investments make it simple and easy to start investing, empowering over 84,000 customers to begin their investment journey since the launch. Similarly, we’ve opened more than 7,000 Ready-Made Pensions accounts, helping customers manage their savings and plan for retirement.

We’re also strengthening customers’ credit health and helping them get better access to borrowing. More than 500,000 customers improved their credit scores through our Your Credit Score tool each quarter last year, building their resilience and confidence along the way, while our Benefits Calculator highlighted £93.3 million of support payable to customers.

We launched our agentic AI financial assistant earlier this year, which will eventually enable 21 million mobile app customers to manage their money more effectively, providing tailored insight on spending, budgeting, savings and investments – all within a secure banking environment.

Helping people to thrive

We want everyone to have the tools, confidence and access to thrive in a digital-first economy, so we’ve helped more than a million people since 2023 build their digital skills and take control of their financial futures through our Lloyds Bank Academy, Digital Helpline and financial education programmes.

But there’s more to be done. Professor Gathergood’s research points to what is possible for the financial services sector as a whole, as regulation, data and technology evolve. Realising the potential value of digitally enabled financial empowerment will require a collective effort – from providers, regulators, policymakers, technology partners and the third sector – and a shared commitment to trust, inclusion and confidence.

When people feel empowered, they are more likely to move beyond day‑to‑day financial management – with greater ability to plan, adapt and invest in their futures. When these experiences of empowerment are repeated, day after day, across millions of lives, their potential impact reaches far beyond individual households.

This is how we build a more resilient and inclusive economy – Helping Britain Prosper.

Financial empowerment in a digital age

Financial empowerment is about enabling people to have greater capability, confidence and control over their financial lives. In this analysis, I focus on how that empowerment is experienced in practice: whether people have the knowledge, skills, tools and opportunities to manage day‑to‑day finances, build resilience, and make informed decisions that improve their financial wellbeing over time. This framing guides the analysis throughout.

This matters because the decisions people make about money – often small, everyday choices – accumulate over time. When people feel in control of their finances, they can make more confident decisions, which pave the way for a more resilient financial future.

Advances in digital technology – and the data processing and analytics capabilities they create – are making this shift possible at scale. Real-time data visibility technologies allow people to see their financial position clearly as it evolves, while Open Banking and emerging Smart Data, intelligent frameworks and agentic AI make it possible to bring together data from different accounts and providers into a single, coherent view, in a consent-based secure data process.

Building on this, predictive analytics can move beyond simply tracking past behaviour to anticipating future needs, so people can better prepare for upcoming expenses or potential shortfalls.

Support that was once generic or difficult to access can now be delivered in real time, tailored to individual circumstances, and embedded into a person’s everyday financial decisions – all within a secure banking environment.

Many of these capabilities are already part of daily life. Millions of people use digital banking tools to check balances, track spending, and move money quickly and securely. But these tools are now evolving from simple interfaces into intelligent systems that people can use to actively manage their money, through timely prompts, clearer insights, and – crucially – with the right level of support to help them make decisions that better reflect the realities of their lives.

This report examines how these developments drive better financial outcomes for people across the UK. By looking at the decisions people make about their money every day, it shows how these individual gains, when realised, can unlock economic potential and contribute to a stronger, more dynamic UK economy.

In this report, I set out the evidence for the economic value of financial empowerment, drawing on published academic research, nationally representative survey data, and established economic modelling techniques.

The analysis and all the estimates presented are my own. The report is structured around seven independent use cases, each grounded in a specific body of evidence, with detailed workings provided in the Appendix.

This report was authored by Professor John Gathergood, Professor of Financial Economics, University of Nottingham, and commissioned by Lloyds Banking Group.

The analytical framework, economic modelling, and all estimates presented are the author's own, based on published academic research, nationally representative survey data, and publicly available sources as cited.

The views and analytical judgements expressed do not necessarily represent the formal position of Lloyds Banking Group or any other organisation. This report does not constitute financial advice.

Projected benefits are modelled estimates based on stated assumptions and should not be interpreted as forecasts or guarantees of future outcomes.

UK adults hold an estimated £430–£610 billion in ‘investable’ cash: liquid savings held by people who have already covered emergencies, sitting in accounts earning materially less than they could be.

£40bn

potential value 
 

~6.5m

beneficiaries at target uptake
 

How it works

The FCA has explicitly described this as a missing opportunity for consumers. A 60/40 equity/bond balanced portfolio delivers real returns of 5.0–5.5% per annum over the long run. Cash delivers approximately 0.5–1.0% in real terms once inflation is accounted for.

The excess return available – 4.5–5.0% per annum – is the potential financial benefit by putting these long-term savings to work in investments.

Digital transformation enables this shift through two main mechanisms. First, the future rollout of digitally delivered investment guidance under the incoming Targeted Support regime, which will allow providers to offer cohort‑based, evidence‑informed guidance to customers who may be eligible to invest but have not yet done so. Second, frictionless digital onboarding makes the move from a Cash ISA to a Stocks and Shares ISA as simple as a few taps.

Research base

FCA Financial Lives Survey (2024); Barclays Smart Investor estimates; FCA CP24/9 Targeted Support consultation.

The projection

If 15% of the eligible investable cash pool – approximately £78–£90 billion – shifts from cash into balanced investments, the excess annual return of 4.75% generates approximately £4.3 billion per year at steady state.

Accounting for a five-year adoption ramp-up and compounding effects on invested returns, the ten-year cumulative benefit reaches £40 billion.

Approximately 17 million UK adults hold unsecured debt across multiple products.

£15bn

potential value 
 

~5m

beneficiaries
 

How it works

Research by Gathergood et al. (2019, 2021) shows that most people do not repay their debts in the most cost‑effective way, often continuing to pay down lower‑interest debts while higher‑interest borrowing builds up. This 'balance misallocation' costs affected borrowers an estimated £250–£450 a year.

The fix is technically achievable: a single view of all debts, ranked by interest rate, with a digital prompt for the lowest‑cost order, or a frictionless consolidation journey where appropriate. Smart Data legislation is creating the regulatory infrastructure for this at scale.

Research base

Gathergood, Mahoney, Stewart & Weber (2019, 2021); FCA Financial Lives Survey debt module; Experian ReFi product design; Jorring (2025).

The projection

5 million adults (30% of those with multi-product unsecured debt) saving an average of £340 per year through optimal repayment or consolidation generates £1.7 billion per year at scale. Ten-year cumulative: £15 billion.

Mortgage payments are the largest single outgoing for most owner-occupiers, yet academic evidence is unambiguous that households are systematically slow to refinance when better deals become available.

£14bn

potential value 
 

£1,500-£3,500

potential mortgage switch saving per household per year
 

How it works

Andersen et al. (2020) and Bracke et al. (2024) both document large, persistent rates of mortgage non-switching.

The UK base rate has fallen from 5.25% in mid-2024 to 4.5%. For many mortgaged households who are in a position to commit to fixed payments, a timely switch could save £1,500–£3,500 per year.

New digital tools – eligibility checkers, decision-inprinciple engines, and pre-approval platforms – are materially reducing the friction that previously trapped consumers on uncompetitive rates.

Research base

Andersen, Campbell, Nielsen & Ramadorai (2020); Bracke, Everitt, Fazio & Varadi (2024); UK Finance Mortgage Statistics Q4 2025.

The projection

2 million mortgaged households (25% of those who could benefit) saving an average of £1,600 per year through timely remortgaging generates £1.6 billion per year at scale. Ten-year cumulative: £14 billion.

An estimated 5 million UK adults have ‘thin file’ or ‘credit invisible’ status – not because they’re poor credit risks, but because traditional scoring models don't capture evidence of their reliable financial behaviour.

£8bn

potential value 
 

~2m

beneficiaries
 

How it works

Many are young adults, private renters, recent migrants, or self-employed workers who pay rent and bills consistently, but aren’t as credit worthy in conventional models. The result is exclusion from mainstream credit markets and reliance on high-cost lending at APRs five to ten times higher than nearprime products.

Research by Jagtiani & Lemieux (2019) and Berg et al. (2020) demonstrates that incorporating alternative data – rent payment history, utility payments, Open Banking transaction data – into credit models can identify ‘invisible prime’ borrowers who are genuinely lower-risk than their thin-file status suggests.

Research base

Jagtiani & Lemieux (2019); Berg et al. (2020); Di Maggio, Ratnadiwakara & Carmichael (2022); Experian/Equifax market reports 2024.

The projection

2 million invisible prime consumers moving from high-cost to near-prime lending (average APR reduction from 28% to 15% on £3,000 outstanding), saving £390 per year, generates £780 million per year at scale. Ten-year cumulative: £8 billion.

Fewer than half of UK adults hold any form of income or life protection insurance, despite widespread financial vulnerability to income shocks documented by the FCA.

£6bn

potential value 
 

~5m

beneficiaries
 

How it works

Even where people do have insurance, it is not always well matched to their needs or actively reviewed, meaning some pay more than necessary by not switching products, or unknowingly hold overlapping cover across different policies.

Transaction data provides a powerful lens for identifying both gaps and waste: an individual with childcare outgoings but no life insurance visible in their transaction history is, in data-evidenced terms, under-insured. Digital tools can surface these opportunities and eliminate wasted premiums at scale. This can ensure that insurance is right-sized for the individual: holding appropriate insurances to cover risks at the most competitive prices available.

Research base

Kunreuther, Pauly & McMorrow (2013); FCA Financial Lives Survey (2024) insurance module; Swiss Re Sigma UK Protection Gap Report.

The projection

Benefits accrue across two subgroups – 3 million households gaining coverage value through right-sizing (average coverage uplift value: £150 per year) and 2 million avoiding duplicate premiums or overpayment (average saving: £120 per year). Annual benefit at scale: £690 million. Ten-year cumulative: £6 billion.

This is the use case with the broadest reach, relevant to virtually every digital banking customer. Evidence from Jorring (2025) and others shows that financial AI has the potential to change this significantly.

£9bn

potential value 
 

~12m

beneficiaries
 

How it works

With transaction classification, pattern recognition, and forward-looking prediction, emerging app capabilities could alert consumers to avoidable financial mistakes and suggest the optimal time to move money into savings within the pay cycle. In this way, better money management can help customers build emergency savings pots, and predict when those pots are at risk of becoming depleted.

Research base

Jorring (2025); LBG Consumer Digital Index; FCA Financial Lives Survey 2024; UKDS Understanding Society financial behaviour module.

The projection

12 million engaged app users realising an average annual benefit of £75 (through avoided mistakes, acting on switching prompts, and optimised savings behaviour) generates £900 million per year at scale. Ten-year cumulative: £9 billion.

Low financial capability is expensive. It’s associated with worse debt outcomes, lower savings rates, higher susceptibility to fraud, and worse long-run wealth accumulation – effects documented across multiple national studies.

£8bn

potential value 
 

How it works

The Money and Pensions Service's baseline survey found that fewer than half of UK adults felt confident managing money, with gaps deepest among younger adults and lower-income groups. Traditional financial education has struggled partly because it’s abstract, infrequent, and disconnected from actual decision-making moments.

Digital delivery changes this: guidance embedded in a banking app – contextual, timely, triggered by real financial events – has materially higher engagement. AI has the potential to amplify this by making guidance more relevant to individual circumstances: not ‘here’s how compound interest works’, but ‘here’s how compound interest works on your balance, and what that means for your plan’.

Research base

Money and Pensions Service (2020); Lusardi & Mitchell (2024); OECD/INFE 2023 International Survey of Adult Financial Literacy; Behavioural Insights Team (2024).

The projection

8 million adults achieving measurable improvements in financial outcomes through digitally delivered financial education that builds financial capability, delivers an average annual benefit of £100. This comes from better product choices, reduced exposure to fraud, and improved financial planning. At scale, this generates £800 million per year. Ten-year cumulative: £8 billion.

Set against the independent evidence in this report, our reflections focus on how financial empowerment shows up in practice for our customers today.

For our customers, financial empowerment is experienced through everyday choices – when digital tools remove friction, provide clarity and support better decisions over time, enabling people to engage with their finances in ways that reflect their own goals and circumstances.

While this report quantifies the potential impact of digitally enabled financial empowerment across seven evidence‑led use cases, it is not exhaustive.

Among the areas not covered, pension savings and retirement optimisation stand out as a particularly significant opportunity - where digital guidance and smarter consolidation could transform long-term outcomes for millions.

Scale of the opportunity

Realising opportunities like this is not simple. Wide‑reaching transformation depends on bringing together digital innovation, evolving technologies and skilled people in ways that genuinely meet customer needs.

At Lloyds Banking Group, we recognise both the scale of the opportunity and the responsibility that comes with it – and we are committed to creating the conditions in which customers can empower themselves through practical tools, accessible guidance and trusted support as they make decisions about their financial futures.

Tools for financial empowerment

That starts by helping people to take control of their finances. For example, our Ready-Made Investments make it simple and easy to start investing, empowering over 84,000 customers to begin their investment journey since the launch. Similarly, we’ve opened more than 7,000 Ready-Made Pensions accounts, helping customers manage their savings and plan for retirement.

We’re also strengthening customers’ credit health and helping them get better access to borrowing. More than 500,000 customers improved their credit scores through our Your Credit Score tool each quarter last year, building their resilience and confidence along the way, while our Benefits Calculator highlighted £93.3 million of support payable to customers.

We launched our agentic AI financial assistant earlier this year, which will eventually enable 21 million mobile app customers to manage their money more effectively, providing tailored insight on spending, budgeting, savings and investments – all within a secure banking environment.

Digital skills

We want everyone to have the tools, confidence and access to thrive in a digital-first economy, so we’ve helped more than a million people build their digital skills and take control of their financial futures through our Lloyds Bank Academy, Digital Helpline and financial education programmes since 2023.

Together, these examples reflect how digital tools can support the seven routes to financial empowerment explored in this report, helping customers to act with greater confidence at moments that matter most to them.

When acts of financial empowerment are repeated, day after day, in millions of lives, their potential impact reaches far beyond individual households – contributing to a more resilient and inclusive economy.

This is how we build a more resilient and inclusive economy – Helping Britain Prosper.