Our research reveals AI provides incorrect financial advice half of the time

AI only gets half of financial advice questions factually correct, meaning that the roughly 40% (source: FT Adviser) of Brits who have used AI tools for financial advice are at huge risk of making errors, our research has found.

We asked AI tools including ChatGPT and OpenAI 100 finance questions across a range of topics, including about savings accounts, housing, investing. tax and retirement, to assess how reliable they are at giving advice.

From the 100 questions, AI tools were correct 56% of the time, deceptive or misleading for 27%, and outright incorrect for 17%, meaning that overall, the advice was not wholly correct 44% of the time.

But when it came to questions about investing and pensions, AI answered more than half – 52% – incorrectly, with 13 out of 25 answers ruled as misleading or incorrect.

Questions such as ‘How much should I save for a comfortable retirement?’ provided outdated facts and figures and stated that the state pension is £185.15 per week – a figure which hasn’t been correct since April 2023.

Questions about tax bands also gave the wrong figures, and those about specific taxes, including ‘What is inheritance tax and how does it work?’, ignored vital information such as how gifts work and how you define a ‘gift’.

Even worse, when it came to questions about major life events and purchases, such as buying a first home, an engagement ring, or a car, AI gave incorrect answers 70% of the time.

Questions such as ‘What credit score do I need to get a mortgage?’, ‘How much of a deposit do I need to buy a house?’, and ‘How much can I borrow for a mortgage?’ offered completely wrong information, often providing data from the US rather than the UK, even when prompted to provide figures for UK people.

Our findings suggest millions of Brits are currently being given wrong or misleading financial advice by utilising AI tools.

Our view – by Antonia Medlicott, founder and MD of Investing Insiders

Our study shows the worrying trend that AI isn’t providing sound financial advice when prompted. Even more concerning is that millions of Brits are doing this and being misled across a range of topics, from basic advice to savings accounts and large life events like buying a home or retirement.

Our stance is simple: Don’t take tools such as ChatGPT at face value. Instead, be sure to consult with real experts, as they are less likely to make major mistakes that could leave you with even larger struggles.

Asking a question to get some initial insight is fine, but it’s important to be safe and double-check any information.

Looking for answers to a major, specific personal matter is where you are most likely to be led astray, which is where professionals are much more reliable.

Ultimately, wrong decisions financially will have a significant impact on your life, and AI doesn’t know your circumstances.