Over half of UK employees admit they have never received any personal finance education such as how to manage everyday spending and saving, according to new research.
The study commissioned on behalf of the Open University Business School (OUBS) and Share Radio, also revealed that while many employees claim to have a reasonable level of financial knowledge, what they have most recently learnt has often been the result of a kneejerk reaction to a major life event, such as leaving school or buying a first property, as opposed to being taught.
Almost half (44 per cent) of those surveyed also confessed that major life events were also the last time new financial knowledge was gained.
Director of the True Potential Centre for the Public Understanding of Finance (True Potential PUFin) at the OUBS, Martin Upton, said: “It’s clear that many generations have suffered from a lack of formal financial education, and, while it was finally added to the school curriculum [in England] last year, there is a real need for many consumers to increase their knowledge of, and confidence in, financial matters.
“By 2018 all employers will have responsibility for offering access to pension schemes, and there should be guidance on the schemes offered and the desirability for employees to augment their state pensions. Assessing how much income is needed in retirement requires budgeting skills and an understanding of taxation. In effect, pension guidance is a stepping stone to wider financial education. We have a situation where only a tenth of consumers have consulted a financial advisor in the last 18 months, so it’s apparent that employers are in a prime position to help their employees get a better understanding of how to deal with their personal finances effectively.”
As a result of financial education being added to the school curriculum throughout the UK, the situation should improve among future generations. There is also a clear need for education among the current workforce, with just 7 per cent having received any assistance from their employer.
Moreover, four fifths (81 per cent) of the UK workforce admit they would favour help from their employer to understand their finances. A third (33 per cent) stated financial education would help them plan their financial future, while 25 per cent said it would help them to understand their pension.
In order to tackle the lack of financial education in the workplace, The Open University Business School, through its dedicated research centre, the True Potential Centre for the Public Understanding of Finance, has partnered with Share Radio, the UK’s only national dedicated personal finance radio station, to make the ground-breaking ‘Managing My Money’ eight week personal finance course easily accessible to any employers looking to encourage personal finance education among its employees.
The course, which starts afresh each fortnight, is free and is broadcasted via the DAB station. There are two 25 minute episodes per week, each with an online test. Following the final, more comprehensive test, students receive a Statement of Participation from the Open University. For the first time students will be allowed to name a third party who can monitor their progress and collect their qualification results. Upon completion participants can include the certificate to their CV to further build their job prospects.
Share Radio, Managing Director, Gavin Oldham said: “The days when personal finance consisted of simply receiving your pay and paying your bills are long gone. In today’s society consumers must not just be thinking about the month ahead but for the long term, including retirement. With the recent changes to pensions, employers now have a huge responsibility to ensure their workforce understand and have the knowledge to make those importance life changing decisions.
“This is why we have partnered with the Open University Business School to broadcast the Managing My Money course, which we hope will help people to become more confident in handling and managing their finances. The partnership also allows employers the opportunity to get involved, monitor and support progress on the course and I’d encourage many to do so.”