Financial literacy still insufficient in the UK to ensure financial wellbeing, TISA and Appinio research finds
- TISA and Appinio conducted a wide-ranging survey on the financial literacy of 2000 respondents.
- When asked if respondents believed school prepared them for financial life, 67.9% disagreed with the statement in some form, 33.8% strongly disagreed.
- While many have a base layer of understanding of the products and options available to them, there is little depth of understanding away from the most common products such as credit cards and mortgages.
- Despite being in place for ten years, 34% of respondents have never heard of the UK Government’s workplace pension initiative – Automatic Enrolment
TISA and Appinio today published further results of a representative study of UK consumers on a broad range of topics conducted in summer 2022. The most recent results focused on Financial Literacy among the UK population and highlighted the lack of understanding of the financial world which exists within UK consumers.
While the surge in Internet banking and digital finance products has enabled more people to access information which was previously privileged to those who could afford financial advisors, there is still a clear gap in knowledge when it comes to the financial options available to people.
The survey conducted a representative sample of 2,000, with the results showing that nearly 70% of participants do not believe school prepared them well for financial life, with 33.8% of those asked holding this position strongly. On the other hand, only 8.1% strongly believe school prepared them well.
Worryingly, research also exposed 47% of respondents had either never heard of the UK’s workplace pension initiative Automatic-Enrolment or had heard of it but could not explain what it was. This has the potential to damage the UK economy and society in the long term. If people are not aware of their pension options, they will be unable to plan and ensure they have the money to live on upon retirement.
On an optimistic note, the younger our participants were, the more well prepared they felt, suggesting there has been a shift in teaching approaches. In a clear sign education around the use of online banking products has had an effect, it was promising to see 85.4% of respondents are in some way confident about navigating their bank and building society website or app.
These more positive steps are exactly why TISA is pushing for a more pro-active approach from Government towards financial literacy. We must have more discussions of topics such as budget planning, credit scores, mortgage application and long-term financial planning within our school curriculum. This kind of information needs to be accessible to people throughout all stages of their life, otherwise we cannot expect people to be able to get through financially harsh periods such as the cost-of-living crisis currently impacting the country.
The full results of the survey are available here: https://research.appinio.com/#/en/survey/public/ZgnogTtOJ
TISA are delivering their ‘The Essentials of Money Management’ course on the 16th of November 2022. This one-day course will cover a range of important financial topics and is ideal for anyone who needs a boost in their knowledge of everyday money matters. You can register for this event here: https://www.tisa.uk.com/product/money-management-workshop/?event_date=2022-11-16
Carol Knight CEO of TISA said
“It has been a pleasure to collaborate with Appinio to better understand the current levels of financial literacy within the UK, as well as the experiences consumers have of the support provided to them by their education and other sources. This data paints a poor picture of the educational system within the UK and how we support people in their financial planning.
“To change, it will require intervention from Government to alter education policy. However, employers must take on a share of the burden by assisting their staff through training programmes to build up the financial education of their employees. This is especially relevant to the gaps in knowledge on pensions within the workplace.
“Within this bleak picture overall, there are clear positive signs that financial education is improving. Collaboration between the education sector, Government and industry can ensure that process continues effectively, leading to better outcomes for all.”