Address financial literacy to solve savings epidemic

Address financial literacy to solve savings epidemic

The financial services sector needs to address the financial illiteracy of the UK population to address the national savings epidemic, Old Mutual Wealth's Jane Goodland has said.

Ms Goodland, the responsible business director at Old Mutual Wealth, said ensuring all groups have the same opportunities for a prosperous later life was key to the nation's prosperity.

She said: "But to tackle the overwhelming national savings epidemic we all need to do more. Crucially, we need to tackle the core cause – financial illiteracy.

"In some ways financial illiteracy is perpetuated by the financial services industry’s reputation for being unapproachable and incomprehensible.

"This has had knock-on negative effects such as failing to attract people from diverse backgrounds into careers in the sector. However, this year the diversity issue finally came to the top of the agenda."

Ms Goodland said attitudes to money are shaped at a young age and this year Old Mutual Wealth was among 16 savings and investment firms to launch KickStart Money – a collaborative project aimed at taking financial education to more than 18,000 primary school children.

She added that Old Mutual Wealth supports calls for financial education to become a compulsory element of the National Curriculum.

Ms Goodland said it was shocking and upsetting that the Financial Conduct Authority found half of British adults are financially vulnerable.

She said: "The FCA's research found vast swathes of the population unable to pay bills and turning to friends and family to make ends meet, which is deeply concerning.

"This strain is felt more acutely by those who are missing out on the policies the government has in place to ensure a healthy saving culture.

"For instance, a huge segment of the population, 30 to 45-year-olds who, are stuck in a gap between pension regimes.

"This group aren’t benefiting from the defined contribution schemes of their elders or a personal pension provision built from being auto-enrolled from a young age, like their juniors."