AI only gets advice correct half the time leaving Brits at risk of making damaging errors, according to research by financial education specialists Investing Insiders.
The data asked AI tools 100 finance questions across a range of topics, including savings accounts, housing, and retirement, to examine how reliable they are at giving advice.
From the 100 questions, AI tools were correct 56 per cent of the time, deceptive or misleading for 27 per cent, and incorrect for 17 per cent.
AI answered 52 per cent of questions about investing and pensions incorrectly.
In this section, 13 out of 25 answers were ruled as misleading or incorrect, with questions such as ‘How much should I save for a comfortable retirement?’ providing outdated facts and figures, as well as stating that the state pension is £185.15 per week, a figure which has not been correct since April 2023.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.
When it comes to major life events and purchases, such as buying a first home, an engagement ring, or a car, AI gave incorrect answers 70 per cent of the time.
Antonia Medlicott, founder and managing director at Investing Insiders, said: “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.”
Medlicott also provided her advice to those asking finance questions to AI tools.
“Our stance is simple, don’t take AI tools 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.”
Meanwhile, David Stirling, IFA at Belfast-based Mint Wealth Ltd, said AI needs to be used wisely.
He said the danger is not that AI will become too intelligent, but that people will rely on it too blindly.
“These statistics show that AI is far from flawless, but these systems take time to learn and will only improve over time so they are far from dead in the water.
“In the argument of adviser versus machine, an adviser will look further into your background details and find a more nuanced solution based on your circumstances than the black and white responses from AI.
“In this fledgling era of AI, human judgment will continue to be the ultimate upgrade and AI responses should always be double-checked and verified.”
Ben Perks, managing director at Stourbridge-based Orchard Financial Advisers, said AI seems to be MIA when it comes to good advice.
Perks said a 40 per cent success rate is “shambolic” and “any human of that quality would be struck off by the FCA pretty quickly”.
“Financial advice relies heavily on personal interactions, care, understanding individuals and outside the box thinking, it’s a long way away from algorithms that spit out generic responses”, he said.
That’s user error, not an AI limitation.
Elsewhere, Mitali Deypurkaystha, human-first AI strategist & author at Impact Icon AI, said: “Let’s be blunt: these researchers don’t realise their study doesn’t expose ‘AI giving bad advice’ — it exposes a UK-wide AI literacy gap.
“Some of what they call failure is user error. Ask AI today for the current UK state pension and you’ll likely get citations straight from gov.uk.
“The other likely error is user knowledge on choosing best-fit AI tools. That’s the ‘GP-vs-surgeon mistake.’ You wouldn’t ask your GP to do open-heart surgery, don’t expect a general AI to be your personalised financial adviser.”
Deypurkaystha argued there is no public, expert-level finance-advice AI for them to test.
“The real warning isn’t ‘don’t use AI’ — it’s ‘teach people to use it well.’ Give the UK accessible, national AI-literacy programmes now,” she said.
However, some argued that it would be at least five years before AI could give suitable advice.
Colette Mason, author & AI solution architect at Clever Clogs AI, explained that the idea that AI is failing because of dated scrapes is a distraction.
“That’s user error, not an AI limitation,” she said. “Any serious user can correct the dated advice by uploading the latest tax advice and thresholds to their own trained assistant, and forcing focus on those documents.
“However, the core issue here is that the reasoning power is still lacking, even if a user updates the facts and figures.
“Andrew Lo of MIT, who is actively building finance agents, states clearly that we are five years away from a bot that can be considered reliable for giving truly tailored advice once a client’s personal details are added.
“That timeline is a brutal reality check for those hoping AI will prove to be an affordable advice tool. For now, and for many novice users, it could prove to be a very costly mistake.”
Thanks to the Newspage community for sharing their thoughts with FT Adviser.
sonia.rach@ft.com
