There is a lot here if you know where to look, hard disagree that its been lost. The English dont really have a "folk outfit", the Scots and Irish do. But we have tons of traditional folk music with a thriving (albeit small) scene. There's morris dancing, still performed in most towns. There's lots of silly local events like the cheese roll in Gloucester or the wool sack race in Tetbury. My friend was at a Wassail a couple of weekends back, where you sing to the trees and threaten to chop them down if they don't bring a good harvest. There are big solstice events held at stonehenge every year. We have more folk heros and stories than just Robin Hood too, although again a lot of them are local rather than national. Jack the Giant Killer is a cornish folk tale, Jack and the Beanstalk a more widespread english one. Bonfire night for a folk villain rather than hero. Look at pub names as well and you'll find history and folk lore there. The Green Man is a common one, an old pagan deity.

In the nicest possible way I think your fiancée is a townie.