Financial education for all

An image of a light bulb lighting up to indicate someone having a bright thought about financial planning

Savings

MoneyPlus Features Team

10th September 2015 at 10:35am

It would appear the stars of stage and screen can be just as in the dark about their finances as many of us.

Come on Arlene

Top choreographer and ex-Strictly judge Arlene Philipps recently admitted in an article with The Mirror newspaper “Yes, I’ve got a pension. I started saving into it about 25 years ago. I haven’t even got a remote clue how much it’s worth. I couldn’t even hazard a guess.”

Arlene is by no means alone with nearly two-thirds of people aged over 45 who are not yet retired admitting to paying little or no attention to their pensions, a survey by Aviva has found.

Some 63% of over-45s said they give little or no consideration to their pension. Those who are further away from retirement are most likely to spend no time reviewing their pension, although a quarter of those retiring within the next two years still fail to dedicate any time towards doing this. Aviva’s research was based on a survey among more than 1,500 people aged over 45 years old who have not yet retired.

Fail to plan, plan to fail

With new pension freedoms landing on 6 April, it’s never been more important to think about how you plan to manage your money in retirement. Whether you’re saving for your future, about to retire, or already enjoying your post-work life, getting plans in place will help put you in control. A good step towards successful financial planning is to make sure you know what you’ve got, so keeping a careful eye on your pension pots is going to prove vital.

I started saving into it about 25 years ago. I haven’t even got a remote clue how much it’s worth

Finances aren’t child’s play

And Arlene is not the only celeb admitting to a little lack of financial savvy, even consumer queen Anne Robinson turned weakest link when it came to guessing the difference between a credit card and a debit card when probed by The Telegraph.

If the Watchdog anchor can freely admit to some patchy financial knowledge then how would our next generation of savers fare?

A survey carried out in 2013 by pfeg (Personal Finance Education Group) unearthed some worrying gaps in the financial knowledge of under-25s relating to bank statements, overdrafts and interest on loans.

Of those surveyed, nearly half were not aware of the difference between being in credit and overdrawn on a bank account statement, while more than a third did not know the correct meaning of APR in relation to interest charges on loans or credit cards.
Around one in eight did not know what an overdraft was, with a number thinking it was a low-cost, one-off loan from a bank.

The kids are alright

But thankfully it’s something that’s not gone unnoticed. Since September 2014 financial education has formed part of the compulsory national curriculum in England and Wales, and it’s been part of the curriculum in Ireland since 2009 with Scotland following suit in 2010.

This is really encouraging news that the UK as a whole will now benefit from some financial schooling from a tender age and bodes well for our financial planners of the future.

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