Managing finances a weakness for many UK adults

The poll of 4,000 UK adults was recently carried out on behalf of the Centre for Social Justice, a think-tank.  Problems were particularly acute among young people, with more than two-thirds, 68 per cent, saying a lack of money management skills had been a key factor in driving them into debt. As financial pressures multiplied, 44 per cent of adults said they would be in much better shape financially if they had been taught basic money management skills such as budgeting.
Internationally, the UK scores poorly on financial literacy compared with other developed nations, with 24 million adults admitting they lack confidence in managing their cash, according to the government’s Money and Pensions Service.
The huge growth of “buy now, pay later” services during the coronavirus pandemic is of particular concern, with tighter regulation expected from the government later this year. Almost one in 10 survey respondents confessed to putting their Christmas purchases on credit, using digital services such as Klarna and Clearpay to spread payments across several interest-free installments. This proportion rose to nearly one in five among 18 to 34-year-olds.
According to Joe Shalam, policy director at the Centre for Social Justice,  “The cost-of-living crisis and fast-changing nature of the financial landscape brings an added urgency to the need for better education, as new financial products are developing faster than they can be regulated,”
Although improving financial education in primary and secondary schools was a key part of the solution, the Centre for Social Justice stressed that the need for better money management skills was the base of grave issues. According to Shalam, “Effective early intervention in schools is crucial, but for plenty of people that’s already too late, stressing the benefits of a “mid-life financial MOT” for workers looking ahead to retirement, as well as educating older consumers about spiraling online fraud”.