A number of industry experts have urged policymakers to prioritise life-long financial education after the Financial Conduct Authority revealed 13mn adults have low financial resilience.
The Investing and Saving Alliance (Tisa) called for policymakers to start financial education in primary school with a view to scale it up throughout the years to reach targeted support in adult life.
Carol Knight, CEO of Tisa, said: “Millions remain trapped in a cycle of financial fragility, one unexpected bill away from disaster.
“The cost of living crisis has affected consumers’ ability to save, leaving them under increasing pressure, anxiety and stress at all stages of their financial journey.”
Knight argued many lack the confidence and support to navigate even basic financial decisions and very few seek financial advice to improve their situation.
“The FCA’s research should therefore come as a catalyst for action, and there are clear opportunities for the government to help change this story,” she said.
“Embedding financial education from an early age and scaling up targeted support are two essential measures that will empower people to improve their financial health, build resilience to financial shocks, and secure sufficient income in retirement to maintain a reasonable standard of living.”
Speaking to FT Adviser, Sarah Marks, CEO of Redstart, said: “This should be a shock to no one.
“If we weren’t teaching children to read, we would not be surprised to find that our adult literacy levels were poor.
“People are having to increasingly stand on their own two feet financially, as the pressures on government finances grow and, according to the actuarial projections on the decrease in size of the working population and increase in the number of people who have retired, the National Insurance Fund will be depleted by 2045.”
Marks said, unfortunately, these outcomes are baked in but the fact that people do not know this, or understand what they can do about it, is not.
“We need to course correct our children by teaching them about how money works in school, but this learning doesn’t stop at school,” she said.
“We need a joined up, government led, strategy for the provision of trustworthy guidance and financial advice throughout life, and advice that is accessible to everyone, regardless of their level of income and savings.”
Tisa agreed that a strategic, joined-up response from industry, government, and regulators is needed.
It called for:
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Financial education to be prioritised from primary school and continue through into adulthood.
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Targeted support measures to be developed by industry to offer personalised advice to consumers on the most suitable ways to manage their money.
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Regulatory reform, particularly of Privacy and Electronic Communications Regulations (PECR), to remove the barrier to effective targeted support.
Leon Ward, CEO of financial education charity MyBnk, told FT Adviser it sees first-hand the financial literacy currently being provided by schools is not fit for purpose, despite significant efforts from teachers.
MyBnk’s research revealed 61 per cent of young people do not recall receiving any financial education at school.
“This contributes to many of the problems people face today, including rising mental health issues, debt, and, in some extreme circumstances, homelessness — making the FCA’s finding that 13mn UK adults have low financial resilience, unfortunately, no surprise,” he said.
“We agree wholeheartedly with Tisa’s response to the FCA Financial Lives survey findings, particularly with the need for financial education to be prioritised from primary school and continue through into adulthood.”
Ward said while financial education cannot solve the problem of financial inequalities alone, building healthy financial habits early is crucial to improving the UK’s financial literacy.
“MyBnk is therefore calling on the government to guarantee a minimum of 30 hours of financial education annually for every 11—18-year-old, integrated across all education pathways,” he said.
Elsewhere, Louise Hill, co-founder & CEO of GoHenry, added: “We have been calling for financial education to be made mandatory in every school in the UK, starting with primary schools, for over three years now.
“With the curriculum review under way, this government has an opportunity to make this happen and transform lives.”
sonia.rach@ft.com
