Nearly half of adults in the UK say they urgently need help managing their daily finances as the cost of living crisis and rising energy bills threatens to plunge millions of household budgets into the red.
As financial pressure increased, 44 percent of adults said that they would be in a much better financial position if they were taught basic money management skills, such as budget.
Problems were particularly acute among young people, with more than two-thirds, 68 percent, saying a lack of money management skills was a key factor driving them into debt.
The 4,000 British adult poll was conducted by Opinium on behalf of the Center for Social Justice, a think tank. This week it has a call for evidence on how financial literacy can be boosted across generations, including a root and branch overview of how financial education is taught in schools.
“The cost-of-living crisis and rapidly changing nature of the financial landscape adds to the need for better education as new financial products develop faster than can be regulated,” said Joe Shalam, policy director at the Center for Social Justice. .
The huge growth of “buy now, pay later” services during the coronavirus pandemic is of particular concern, with strict regulation expected from the government later this year.
Nearly one in 10 respondents admitted that they put their Christmas purchases on credit by using digital services like Klarna and Clearpay to spread payments over various interest-free installments. It has risen to almost one in five under 18- to 34-year-olds.
“Our concern is that people are not equipped with a well-rounded understanding of what happens when you can not pay,” Shalam added, noting that debt becomes unaffordable due to “different forms of credit that are not fully committed within not the financial ecosystem ”.
Internationally, the UK scores poor on financial literacy compared to other developed countries, with 24 million adults admit that they do not have self-confidence in managing their cash, according to the government’s money and pension service.
Last year, the Financial Times reported the creation of a charity, the Financial Literacy and Inclusion Campaign, to cultivate awareness and support for change.
Although the government recently committed £ 560 million to this improving numeracy skills for adults, the Center for Social Justice said that financial education is an issue that has fallen on the political agenda.
“Better financial education is mutually beneficial, but it is not on the map as we would like it to be,” Shalam added.
The last major policy intervention was to provide financial education on the National Curriculum in England in 2014, but its effectiveness was hampered by lax provision, a lack of general teaching standards and the struggle to find class time.
“Financial education must be seen as a core element of the government’s skills agenda and must be firmly embedded in our education system,” said Robert Halfon MP, chairman of the education-selected committee.
Although improving financial education in primary and secondary schools was a key part of the solution, the Center for Social Justice stressed that the need for better money management skills is a “cradle to grave” issue.
“Effective early intervention in schools is crucial, but for many people it is already too late,” Shalam added, emphasizing the benefits of a “mid-life financial MOT” for workers looking to retire, as well as to to educate older consumers about spiraling. online fraud.