We need financial education in the workplace

Chloe Cheung

Chloe Cheung

Providers and advice companies often talk about the advice gap, and the importance of financial education in schools, with the two issues going hand in hand.

Like many, I did not learn about personal finance at school. Instead, I am self-taught, as a side benefit of having spent the past few years as a financial journalist.

Some of the things I have learnt from my day job, to name a few, are:

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  • That interest rates on cash Isas are generally less competitive than ordinary savings accounts;
  • Not to expect the best savings rates from High Street banks;
  • That a credit report can help you spot identity fraud.

But since it was introduced into the national curriculum in 2014, financial education has become more common, according to a survey from the London Institute of Banking & Finance. Three-quarters (74 per cent) of secondary school pupils said they studied personal finance last year, compared to three in 10 (29 per cent) in 2015.

Even if I did have personal finance lessons at school, I wonder how much I would still remember today. For example, I learnt about economic concepts such as game theory, the production possibility frontier, and cross elasticity of demand at school. But if I had to explain these concepts today, it would be from Google, rather than from memory.

Financial education at work

For those of us who missed out on financial education, the workplace should be the next port of call. And even for those who do have personal finance lessons, it would be an opportunity to reinforce what was taught. The world of work is when concepts like tax codes, income tax, national insurance, salary sacrifice and defined contribution pension schemes become a reality.

Financial education at work could also fill any gaps in knowledge. According to LIBF’s survey, three in five secondary school pupils (62 per cent) said they had not received any information about tax in school.

Many of us already have to complete compulsory training on data protection and health and safety on a regular basis. Perhaps there could be a module on personal finance, too.

So as well as brushing up on who is a data controller and how to set up our workstation properly, we could learn more about how the pension we are automatically enrolled into works, and how to choose the best account to save our salary into.

Instead, there is a lot of onus on individuals to seek out financial education, whether that be in the money section of the papers, from personal finance gurus or less reliable sources such as TikTok. Or for providers to catch our attention when they advertise their products and services.

A stepping stone to advice

Financial education can mean the difference between saving in an account offering the current top rate of 1 per cent for instant access, versus one of the many offering 0.1 per cent. It could mean more mortgage borrowers switching away from their standard variable rate, and more people understanding the potential benefits of investing.

When people start realising the benefits of financial education, it makes it easier to understand the additional benefits that advice can bring when it comes to more complex issues such as estate planning, or whether we are saving enough into our pension for the retirement we want.