6 minute read
You can ask ChatGPT almost anything about your money.
Should you pay more into your pension? How could you invest a lump sum? What happens if you retire five years earlier?
Within seconds, artificial intelligence can produce an answer that sounds informed, confident and specific to your question. But did you know AI models gave inaccurate answers to financial questions 57% of the time on average, according to a study by fintech firm Saturn.
That matters because AI is already becoming part of how people manage their money. Research commissioned by the Financial Conduct Authority found that 16% of consumers use AI for at least one personal finance activity, with adoption particularly strong in more complex areas such as investing, debt management and tax planning.
AI can be an incredibly useful way to learn about money, explore your options and prepare for important decisions. But there is a big difference between helping you understand a choice and knowing which one is right for you.
Making the right financial decisions often requires something more: an understanding of your circumstances, concerns and goals, and how they all fit together. That is where a human adviser can make the difference.
At a glance
- AI can be useful, but its answers can be inaccurate or incomplete
- You may have little protection if you lose money after acting on information from AI
- Human advice considers your wider finances, goals and circumstances
AI is already changing how we manage money
AI is no longer simply explaining financial jargon. People are beginning to use it to help decide what they should actually do with their money.
Citizens Advice says it is already seeing the consequences. Some clients have acted on poor guidance from large language models and experienced negative outcomes, while others have been reluctant to believe regulated debt advice when it conflicts with what an AI tool has told them. The charity has also encountered responses from AI that lacked important nuance or referred to fictional cases.
AI could soon do more than simply answer questions about your money. The FCA’s Mills Review says AI tools could eventually take financial actions on your behalf.
For example, instead of asking AI where you could invest your money and then making the decision yourself, you could set a goal and allow it to make certain decisions for you within the limits you have chosen.
This could make managing your money quicker and easier. But it would also mean handing AI more control over your finances.
The question then becomes: “How much of my financial decision making am I comfortable handing over to AI?”
Would you trust ChatGPT with your money?
Imagine you have £100,000 to invest.
You could tell an AI tool your age, income, savings and attitude to risk, then ask it to suggest an investment strategy. Within seconds, you might receive a detailed answer explaining where your money could go and why.
Would you trust it enough to act?
FCA commissioned consumer research shows 26% of consumers view AI tools such as ChatGPT as a reliable source of financial information or advice. Interestingly, that rises to 57% among people already using AI for personal finance or financial products.
That gap matters. The more familiar you become with AI, the easier it may be to trust what it tells you. But confidence in an answer does not necessarily make it right for your circumstances.
AI only knows the information you give it. It likely won’t know about a pension you hold elsewhere, your mortgage, plans to help your children, an inheritance you expect to receive or the lifestyle you hope to have in retirement, unless you’ve inputted that information.
Your finances also interact with each other. Taking money from a pension could have tax implications. Selling one investment may alter the balance of your portfolio. Using cash to pay down your mortgage could affect what is available for another goal.
A plausible answer to one question is not necessarily a financial plan.
What AI does well
There is plenty AI can do well when you use it as a tool rather than a decision maker.
If you receive a pension statement full of unfamiliar terminology, you can ask it to explain the language in plain English. When you are researching investments, it can summarise information and highlight concepts you may want to investigate further.
It can also help you prepare for professional advice. If you have a meeting coming up, ChatGPT could help you create a list of questions about your pension, investments or retirement plans so you arrive better informed.
The FCA’s guidance on using AI for investment research highlights some of the same strengths. It says AI can simplify complex topics, make research more efficient and summarise lengthy investment reports into key points.
Used in this way, AI can help you get to grips with a complicated subject before you decide what to do next.
Where AI falls short
One of AI’s greatest strengths can also be one of its biggest weaknesses: it can sound convincing even when it is wrong.
An answer might be clear, detailed and confidently expressed while containing inaccurate or outdated information. Tax allowances, pension rules and financial regulations can change, so even a small error can matter when it is your money at stake. Getting accurate information can make a real difference to your financial security and peace of mind.
We put ChatGPT to test for a step-by-step guide to planning for retirement. The initial response referred to US specific sources of retirement income, including Social Security and 401(k) plans, rather than their UK equivalents. When prompted specifically about the UK, ChatGPT produced a more relevant response.
The example shows why it is important to check not only whether an AI answer sounds convincing, but whether the information it gives you is actually relevant to your circumstances.
Lloyds Banking Group’s 2025 Consumer Digital Index found that 80% of people using AI for their finances were concerned about receiving inaccurate or outdated information.
Financial planning involves more than feeding a few figures into a prompt. Even two people with identical pension pots and salaries could have very different priorities.
Privacy deserves consideration too. Before entering details about your income, savings or investments, check what you are sharing, whether it is necessary and how the service says your data will be handled.
AI can process information remarkably quickly. It cannot guarantee that the answer it produces is accurate or right for you.
What if AI gets it wrong?
There is another important question to ask before relying on a general purpose AI tool, such as ChatGPT, Google Gemini or Microsoft Copilot. These tools are designed to answer questions on a wide range of topics rather than provide regulated financial advice.
What happens if the answer is wrong and you lose money?
The FCA commissioned AI Consumer Research found that only 40% of consumers correctly recognised there is no formal route for recourse if something goes wrong after acting on investment advice from a general purpose AI tool.
General purpose AI tools are not regulated by the FCA. If something goes wrong after you act on their information, you may not have access to the protections that come with regulated financial advice, such as the Financial Ombudsman Service or Financial Services Compensation Scheme.
The more significant the decision, the more important it is to know when AI is not enough.
When you need an adviser
Some financial decisions can shape your finances for decades. That is where understanding your whole situation, rather than answering one question in isolation, becomes particularly valuable.
Fred Barton, an independent financial adviser at Flying Colours, points to an important distinction: general purpose AI tools such as ChatGPT are not regulated by the FCA and cannot provide regulated personal recommendations. “It doesn’t know you,” he says. “It doesn’t know your anxieties, your fears, whether you have dependants, or whether you have health issues.”
That matters in areas such as retirement planning, where decisions can depend on your pension, State Pension, partner’s finances, income needs and family circumstances.
An adviser can consider your pensions, savings, investments, tax position, income requirements, family circumstances and longer term goals together. They can also explore how one choice could affect another before you act.
Suppose markets fall sharply just after you retire. AI can explain what has happened and show you historical information. An adviser can revisit your plan, understand your concerns and help you decide whether anything actually needs to change.
Financial planning is about making choices that work for your life, both now and in the years ahead.
AI or adviser? You can use both
Combining technology with professional expertise may be the approach that works best for some people.
Use AI to learn. Ask it to explain unfamiliar terms, summarise complicated information and help you work out which questions you want answered.
Consider professional advice for decisions about your pension, investments or retirement, where an adviser can look at your finances as a whole and recommend what is right for you.
Research by Unbiased among 800 UK adults actively seeking financial advice found that just 6% would rely on an AI platform alone to manage their investments. By comparison, 40% would only use a human adviser, while another 34% were open to an adviser using AI tools.
AI can provide speed, accessibility and help you ask better questions. An adviser can bring context, judgement and accountability to the decisions that matter.
Ready to talk about your finances?
AI can help you explore the questions. A financial adviser can help you work out what the answers mean for you.
If you are approaching retirement, reviewing your investments or facing a significant financial decision, Flying Colours Advice can help you understand your options and decide what comes next.
You can arrange a conversation with an adviser here: https://fcadvice.co.uk/book-an-appointment/
Please note:
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term (minimum of 5 years) and should fit in with your overall risk profile and financial circumstances.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
Tax treatment depends on individual circumstances, and thresholds, percentage rates and tax legislation may change in future Finance Acts.
The Financial Conduct Authority does not regulate estate planning, tax planning, trusts, or Will writing.
Planning horizons are illustrative and will vary based on individual health, circumstances, and life expectancy.