Two-thirds (64%) of UK employees have never received any personal finance education, according to research commissioned on behalf of the Open University Business School (OUBS) and Share Radio.
The research 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%) of those surveyed also confessed that major life events were also the last time new financial knowledge was gained.
How employees admit they have learnt personal finance education*
|Through family and friends||12%|
|Self-taught from the media||10%|
|Self-taught from the internet||8%|
|From their employer||7%|
|While at school||6%|
|While at university/college||6%|
|Self-taught from personal finance books||5%|
*Survey respondents were able to give multiple answers to this question
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% having received any assistance from their employer. Moreover, four fifths (81%) of the UK workforce admit they would favour help from their employer to understand their finances. A third (33%) stated financial education would help them plan their financial future and 25% said it would help them to understand their pension. Of the ways employees would like their employer to help them, more than a quarter (26%) favoured one-to-one sessions and 22% would like the option of free financial courses.
Director of the True Potential Centre for the Public Understanding of Finance (True Potential PUFin) at the OUBS, Martin Upton, said:
“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.”