Young professionals gaining financial literacy is becoming more important than ever
With the escalating cost-of-living having a huge impact on people’s finances, managing how and where money is spent and saved has never been as crucial. Worryingly, a recent report from Money and Pensions Service (MaPS) found that half of adults in the UK struggle with day-to-day financial literacy.
Partner and Actuary for Quantum Advisory, Stuart Price, offered his thoughts on the subject and in particular, how it is impacting the younger generation:
“Rising inflation and the current cost-of-living crisis has left many young professionals feeling overwhelmed when it comes to their in-comings and out-goings. Misguided advice suggesting they cancel their Netflix subscription or ditch the Costa drive-thru in order to get on the property ladder is neither practical nor helpful. The reality is that the situation we now find ourselves in reaches further than any subscription or occasional latte. Teaching youngsters how to successfully manage their finances from the moment they are old enough to understand is the real key to financial stability and independence – and is now more important than ever. Having a one-off chat with mum and dad as they leave home is a good start but doesn’t go far enough – in my opinion it requires a complete reform of the financial education in this country.
“Children will form life-long money habits by the age of seven according to MaPS, yet two thirds of children don’t receive any financial education by the time they leave primary school. Building on the dedicated finance classes introduced to the secondary school curriculum in 2014, these lessons should extend to younger pupils, colleges and beyond into places of work.
“Organisations as a matter of course should provide financial wellbeing policies to support staff, particularly the younger ones, and instill a greater understanding of credit, budgeting, mortgages, pensions and investments.
“MaPS is going a long way to support this vision, however the system overhaul to empower individuals with the necessary tools and knowledge to manage their finances confidently needs a combined effort.
“My daughter has just started secondary school and as both her parents are actuaries, she is lucky enough to have a head start compared to many of her peers when it comes to financial literacy and the importance of prudence. However, for many this is not the case and it needs to start at the top with the government and work down through the education system, through parents and family and employers until everyone in the hierarchy is working to together to achieve the same unified goal.”
Pension Awareness Week takes from 31st October – 4 November with events taking place across the week. For more information about Pension Awareness Week and the free financial support available, visit www.pensionawarenessday.com.