Fixing adult financial literacy in the workplace

In many cases, our ability to handle these everyday equations is the difference between contentment and deep anxiety, so it’s important that everyone has a basic understanding of what money does, where it comes from and where it goes.

The lack of financial skills

It’s worrying, then, that new evidence suggests adult financial skills are far from where they should be. Research by Cambridge University and University College London has uncovered a “striking weakness” in this area.

The survey quizzed 100,000 respondents in 31 countries. Each was given four ‘straightforward’ questions designed to demonstrate their knowledge; for example, “If a litre of cola costs $3.15, how much will you pay for a third of a litre?”.

A third of adults in England could not say how much change they should expect after buying something in a shop, while half could not read a basic line graph. More than half could not calculate a percentage discount.

By extrapolating these figures up to the national level, the size of the problem becomes clear. England’s position far down the report’s international league table reflects the need to improve.

The study’s authors called for an “urgent policy intervention”, to prevent people becoming hopelessly indebted or being financially exploited.

It stated: “The ability to solve financial problems is critical to the wellbeing of adults across the world since everyday transactions, such as saving, spending and interacting with banks, require significant understanding of key financial concepts.”

The impact on employees

These findings are even more stark set alongside recent research by Neyber, showing that money is UK employees’ biggest concern, above health and establishing a work-life balance.

They also chime with YouGov figures revealing one in 10 employees are struggling financially and 2.1 million are forced to plunder their overdrafts every month just to get by.

Clearly, this is a major challenge for employees; one that can have an insidious and draining effect on their quality of life. Debt and money worries can unbalance mental health, reduce feelings of self-worth and compromise relationships. But they can also feed through to performance levels at work. Staff with money on their mind have been shown to suffer reduced concentration, impaired decision-making, lower productivity and more days off each year.

So it’s vitally important that employers play their part in helping people get a better grasp of financial affairs. Given the seriousness of the situation, this assistance should go beyond pension provision, childcare vouchers and money-off perks; it should also include explicit financial wellbeing education.

Luckily, many bosses are on-board with this new way of thinking. The Neyber research shows 82 per cent believe delivering financial learning is an essential next step. On the flip side, six in 10 employees aged 25-to-34 said they would access keenly such support if it was offered to them.

Tackling the financial literacy crisis

Benefits packages are due an upgrade, it seems. New additions should include not just financial incentives that help people manage their money and plan for the future, but also learning tools that help them understand why this is important and how it can be done.

Employers are in a position to help ease the UK’s financial literacy crisis and, in doing so, alleviate the burden of money-trouble from the shoulders of millions of employees. It’s time to act.

Learn more about how Neyber support employers who want to make a difference to their employee’s financial literacy.

This article was provided by Neyber.

Neyber is sponsoring REBA's Employee Wellbeing Congress 2018, which is being held on 5 July in London.