40% of adults are not in control of their personal finances, research by the Money Advice Service suggests.
20% are unable to read a bank statement while 40% have less than £500 in savings. 1 in 3 are unable to calculate the effect that a 2% annual interest rate will have on their savings.
In affiliation with the UK Financial Capability Board, a new 10 year financial capability strategy has been proposed to tackle the low levels of financial capability in the UK. The strategy will improve people’s ability to manage money on a day-to-day basis, focusing on developing their skills and knowledge to manage their personal finances.
Research among 5,000 adults and key organisations has identified problems in relation to managing their finances. Key findings include:
- 50% of families have life cover
- 21 million don’t have £500 in savings to cover regular bills
- 19 million lack an efficient budgeting approach to managing their finances
- 8 million have problems with debt.
The new strategy will help improve everyday management of finances among adults. The strategy will focus on 2 concepts:
- collective impact and cross-sector co-ordination
- delivering evidence-based interventions, with resources aimed towards activities to improve financial management.
Andy Briscoe, chairman of the Financial Capability Board, said:
“4 out of 10 adults are not in control of their finances, so for a great many people money is a constant source of worry and stress. This is a problem first and foremost for the individuals concerned and for their families, but it also has wider implications for society and the economy.
“The stubbornly low levels of financial capability in the UK can no longer be tolerated. Today we are calling for a fully collaborative approach to ensure we achieve the goals set out in the strategy over the next decade.”