Third of people never heard of auto-enrolment

Third of people never heard of auto-enrolment

The Investing and Saving Alliance (Tisa) has called on employers and the government to improve financial literacy among adults after its recent research showed a third of people do not know what auto-enrolment is.

Tisa said its survey of 2,000 UK consumers showed that financial literacy among UK adults is "insufficient to ensure financial wellbeing".

The organisation highlighted that while internet banking and digital finance products have enabled more people to access information previously only available to those who could afford financial advisers, there is still a clear gap in knowledge when it comes to the financial options available. 

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The research showed 68 per cent of respondents did not believe school prepared them well for financial life, while 34 per cent of those surveyed held this position strongly.

Only 8 per cent of respondents said they strongly believed that school had prepared them well. 

The results also showed 47 per cent of respondents had either never heard of the UK’s automatic enrolment pension system, or had heard of it but could not explain what it was.

Some 34 per cent of respondents said they never heard of it at all. 

Call for government action

Tisa chief executive, Carol Knight said the picture painted by this data of the UK education system and how people are supported in their financial planning is a poor one. 

“To change, it will require intervention from the government to alter education policy,” she said. 

“However, employers must take on a share of the burden by assisting their staff through training programmes to build up the financial education of their employees. This is especially relevant to the gaps in knowledge on pensions within the workplace."

“Within this bleak picture overall, there are clear positive signs that financial education is improving. Collaboration between the education sector, government and industry can ensure that this process continues effectively, leading to better outcomes for all,” Knight added.

Younger respondents reported feeling more prepared when it comes to financial decisions, something Tisa said showed there has been a shift in teaching approaches. 

Overall 85 per cent of respondents said they are in some way confident about navigating their bank and building society website or app.

Tisa said this highlighted the need for a proactive approach from government towards financial literacy. 

“We must have more discussions of topics such as budget planning, credit scores, mortgage application and long-term financial planning within our school curriculum,” Tisa said. 

It added: “This kind of information needs to be accessible to people throughout all stages of their life, otherwise we cannot expect people to be able to get through financially harsh periods such as the cost-of-living crisis currently impacting the country.”