British schools are failing to teach pupils about personal finance, new research has shown.
In a survey, commissioned for the Financial Times by Ipsos Mori, 90% of people in England admitted to learning “nothing at all” or “not very much” about finance during their school education.
Out of the 3,194 people surveyed, barely half of them were able to correctly compare the costs of borrowing via credit cards or bank overdrafts, regardless of their wealth, ethnicity or gender.
However, the data did highlight that financial understanding among four constituencies in particular had clear gaps in relation to the national average — deprived areas, the young, women, and ethnic minorities.
Due to this, the FT has launched a new charity, endorsed by former prime minister Gordon Brown, with the aim to promote financial literacy and inclusion around the world.
The FT Financial Literacy and Inclusion Campaign (FT FLIC) unveiled its strategic plan to boost the financial literacy of young people, women, and disadvantaged communities at an event hosted by Roula Khalaf, editor of the newspaper.
The plan will develop educational programmes to tackle financial literacy, starting first in the UK with aims to expand across the globe.
According to the World Bank, two in three of the global population, including one in three in the UK, are financially illiterate.
It will seek to warn people about potential financial traps as well as empowering them to realise their aspirations, the FT said. It will also campaign for policy change and clearer product communication by financial companies.
“Improving financial literacy for people that need it most, will empower and build financial resilience amongst communities that have faced growing inequalities exacerbated by the pandemic and austerity,” Aimée Allam, executive director of FT FLIC, said.
“We have now outlined our ambitious goals to improve financial literacy, and our success will be determined by our ability to achieve these goals in an effective and measurable way.”
Speaking at the launch, Gordon Brown said: “In surgeries, I came face-to-face with constituents who could not manage their finances or pay their bills, who racked up debts and fell into the hands of money lenders.
“I saw not only the despair that this brings and the impact it has on physical and mental health but the need for far greater financial literacy.”
He added: “Financial worries have been exacerbated by the pandemic and will certainly worsen when six million families in the UK find their universal credit is cut by £20 a week. I welcome this initiative to create an umbrella foundation that will not only work with current providers at the grass roots level, but it will also seek changes to policy.”
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