City should teach personal finance

 
Elizabeth Fournier
CITY A.M. is today launching a campaign to increase financial literacy in the UK, and calling on City companies to provide significant financial support for an educational fund.

A report into UK financial literacy by the Financial Services Authority (FSA) in 2005 found that only 19 per cent of people stay informed of financial products and specific financial information sources, and that most still rely on general newspaper, television and radio content.

Although 81 per cent of those heading for retirement did not think a state pension could provide them with the standard of living they hope for when they give up work, 37 per cent had made no additional provisions for a private pension plan.

The campaign has been welcomed by Conservative MP Sajid Javid and, as our City Views prove, has the weight of the workforce behind it.

But it’s not just the general public that have a knowledge shortfall – financial education needs to target all sectors of society, and to start with the basics.

“I’ve found that even in the Houses of Parliament there are some MPs that struggle with the difference between the debt and the deficit,” said Javid. “I’m convinced that increasing financial literacy is a great cause and City A.M. can run an interesting debate on a matter that deserves to be looked into.”

The establishment of the Consumer Financial Education Body last year is a step in the right direction, but it currently raises all funding through FSA contributions, rather than voluntary donations.

A much larger source of money is needed, and it should be provided by those who have both the motivation and the means to make an investment in the country’s financial future.