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Two fifths of Britons have poor financial literacy

23 million adults have low levels of financial literacy according to a recent study by Opinium for Abrdn. For the first time, 3,000 participants in Britain were asked three key questions developed by the Global Financial Literacy Excellence Center in the United States, which are internationally recognised benchmarks for measuring financial literacy. Only one in five were able to answer three basic questions on savings and investments.

Jonathan Watts-Lay, Director, WEALTH at work, a leading financial wellbeing and retirement specialist, and provider of financial education in the workplace, comments,

“Unfortunately, it’s well known that when individuals do not fully understand their finances and how to address current difficulties and mitigate potential risks, it can result in stress.

“A lack of understanding of their finances and financial management could result in people making poor decisions which can prove very costly, especially at retirement when people are faced with complex decisions about what to do with their retirement savings.

“Helping employees to understand the key financial issues that relate to them is an effective way of overcoming the risks of poor financial literacy. This is because when employees feel in control of their finances, their overall wellbeing is greatly improved. A commitment is therefore needed by employers to provide workplace financial wellbeing support including education and guidance to help employees avoid some of the financial challenges they find themselves tackling at different stages of their lives.

“This means offering financial education programmes that help employees with a full range of money matters throughout their career including ways to manage a budget, save money, manage debt, boost savings and prepare for retirement.”