More than one in five adults cannot read a bank statement demonstrating “stubbornly low” financial skills in the UK, new research suggests.
A survey conducted by the Money Advice Service found that 21 million adults had less than £500 in savings to cover unexpected bills leaving them vulnerable to financial shocks.
It has launched a 10 year Financial Capability Strategy to improve people’s ability to manage money well day to day as well as prepare for and manage life events.
Its focus will be on developing people’s financial skills and knowledge as well as their attitudes and motivation at different stages of their lives.
Andy Briscoe, Chairman of the Financial Capability Board said: “This is a problem first and foremost for the individuals concerned and for their families, but it also has wider implications for society and the economy.
“The stubbornly low levels of financial capability in the UK can no longer be tolerated. Today we are calling for a fully collaborative approach to ensure we achieve the goals set out in the Strategy over the next decade.”
The research included a survey of 5,000 people and consultation with other key organisations and institutions.
It found approximately 8 million have debt problems but only one in six was seeking help, while a third of respondent could not calculate a simple interest rate.
The report suggested an existing “spend today rather than save for tomorrow” culture, which was made people at risk of financial difficulties.