AI chatbots, such as Chat GPT, Google Gemini and Microsoft Co-pilot are increasingly being used to help with money decisions. While this can feel like you’ve got your very own financial expert in your pocket, the reality is more complicated.

Research suggests AI can boost confidence, but that confidence doesn’t always translate into better outcomes. A study reported by FortuneOpens in a new window found that while many millennials and Gen Z users felt more confident after using AI for financial advice, over half said it had led them to make at least one poor financial decision. Feeling more confident doesn’t always mean the information is accurate.

Here’s what you need to know before relying on AI for budgeting, saving or investing.

Ask an AI tool to break down a confusing financial term, and it’ll do it in seconds. Want help drafting a message to your energy provider? No problem. Need a simple budget? It can build one in minutes. AI tools may be able to:

• explain financial terms in simple language
• summarise long documents, like terms and conditions
• help you compare options based on the criteria you give it
• create budgets or savings plans tailored to your goals
• help you role‑play tricky conversations, like negotiating a bill or asking for a refund.

Used carefully, AI can be a helpful starting point for exploring money questions you might otherwise put off – but how useful it is will depend on the quality of the information you give it and the complexity of your situation.

It’s important to remember that AI tools can sometimes sound confident even when they’re wrong, so they shouldn’t be relied on without checking information against trusted sources.

AI tools can “hallucinate” –  in other words, give information that sounds convincing but is simply wrong. AI doesn’t “know” things; it predicts them. That means it can give:

• advice that sounds right but isn’t
• give outdated or UK‑irrelevant guidance
• misinterpret FCA‑regulated topics like pensions or investments
• offer steps that go against your provider’s rules
• make assumptions that don’t fit your situation
• generate scams or fraudulent content if prompted the wrong way.

Remember: AI cannot replace regulated, personalised financial advice.

A recent Which? InvestigationOpens in a new window found that AI chatbots sometimes gave risky or incorrect investment guidance, even when asked to be cautious.

The risks don’t stop there. AI can also:

• store the information you type
• expose personal data if misused
• be manipulated by scammers to produce highly convincing frauds.

So keep anything sensitive to yourself no account numbers, no National Insurance details, no full personal info etc. Cybercriminals are already using AI to create more realistic phishing emails and scam websites.

If in doubt, keep the details vague and never type in account numbers, National Insurance numbers or card details.

Fraudsters now use AI to clone voices, create fake websites, mimic real brands and produce incredibly convincing messages. If you get an unexpected request for money or investment, think twice; especially if there’s urgency or pressure.

If an offer seems too good to be true, or pressures you to act quickly, it’s a red flag. Use the FCA ScamSmart tool to check investmentsOpens in a new window and always verify contact details from official websites, not messages or emails.

If you choose to use AI for money decisions, treat it as a starting point and take steps to check the information before acting on it.

• fact-check important answers using trusted sources, such as GOV.UK or your bank or a regulated provider
• ask the AI tool to explain where its information comes from
• compare answers across different tools or sources, rather than relying on one response
• use AI to explore ideas or understand concepts, not to make final decisions
• check any financial opportunities on the FCA Firm CheckerOpens in a new window before taking action.

And if you’re unsure, speak to your bank or another regulated provider before taking action.

AI can be a helpful starting point for making sense of money tasks, but it isn't a substitute for professional advice or guidance, nor should it be trusted blindly. Think of it as a tool, not a decision‑maker. 

If you want to learn more about staying safe online or spotting scams, visit our guides, Am I being scammed? How to tell if you’ve been targeted, and Shopping and paying safely online.

To check whether an investment or pension opportunity could be a scam, use the FCA’s ScamSmart toolOpens in a new window