The State Of Financial Education In The UK

Managing money: Helping people with financial education

You likely see it on the news every day: we’re in challenging times. With our economy responding to the last few years as best it can, people in the United Kingdom are experiencing numerous types of financial pressure simultaneously.

With issues such as interest rates, inflation, housing prices, and wages all being in the headlines at the same time, we’re seeing clear indicators of the need to support and empower people across the country with the financial knowledge they need to get through what many experts are calling the most difficult financial period in a generation.

Today we’re discussing recent findings and statements on this subject. After that, we’ll close with a practical set of pointers that you and your loved ones can consider as you address your finances and work to improve your finances.

The basics matter

When people think about finances, it’s easy to think about advanced concepts like loans, compound interest, and mortgages. These are all important and necessary parts of life, it’s true, but the fact of the matter is far simpler. Just understanding things like budgeting and basic financial planning can make a huge difference.

Many adults in the UK struggle with a lack of foundational knowledge where money is concerned. This is an issue that puts them at greater risk during difficult economic periods such as the one we’re going through right now.

Encouraging people to discuss how they manage their money and what works for them is important. Sharing knowledge allows people to learn and grow. Plus everyone wants to know if there is a way they can save some money.

Young adults: In need of help

Of all the demographics facing difficulties right now, the younger generation is facing more than their fair share. In any tough economic period, the combination of lower average wages and fewer resources can cause serious problems.

The issue becomes clearer when you look at recent polling by the Centre for Social Justice (CSJ). 44% of people say they would benefit significantly if they had been taught more about money in school. By contrast, over two-thirds of young people claiming a lack of experience and education in money management had been a decisive factor in them accruing debt.

The same study found more people are taking on new forms of debt like buy now pay later and other financing. These debts can be complicated and if people do not fully understand the commitment they are agreeing to, they can lead to financial issues.

UK financial literacy: Room for improvement

24 million people in the UK said they lacked confidence when it comes to managing their money. This lack of confidence is a problem in and of itself. If people are unsure what they should do, they are more likely to make poor financial decisions or delay decisions altogether.

While recent efforts such as a £560m bill aimed at improving numeracy in adults are encouraging, experts are still advocating for more comprehensive reform of how children and young adults are educated on financial literacy and responsibility. In time, a higher prioritisation of this subject could empower people to thrive when the economy is doing well and to endure economic slumps that may occur in the future.

First steps: Improving your financial literacy and responsibility

It can be daunting when you first start learning about money management. There are lots of new terms and confusing jargon. Plus no one wants to make a mistake and lose money. Here are a few tips to help you get started on this important and worthy path.

There’s no such thing as too late: It doesn't matter what age you start, learning how to better manage your money is always worth the time. The sooner you start, the sooner you get to reap the rewards. Plus, there are usually some quick wins as you begin to understand your finances so you can often make a big difference with just a few changes.

Get in touch: You may be surprised to find out how many organisations and companies you regularly use can help you. Your local bank or credit card provider, for instance, will have a customer service team that’s more than happy to take your call and to see how they can signpost you to resources to help you with your money.

You can also negotiate with some businesses. For example, if you are worried about paying your credit card this month, you may be able to set up a payment plan with your card provider rather than having to pay late fees.

Be honest with yourself: It’s daunting to lay it all on the line, but it’s the best way to get started if you’re beginning your financial education. Instead of aiming to fix all your money issues in one fell swoop, it can be a great starting point to simply commit to monitoring your activities for a fixed period.

From there, you can make modest steps towards improving your finances while knowing that you have all the information you need to make the correct decision. Remember, you have your whole life to get better; slow and steady really can win the race.