Employers have a fundamental role to play in increasing financial literacy levels
Financial literacy is a combination of financial awareness, knowledge, skills, attitudes and behaviours necessary to make sound financial decisions and, ultimately, achieve individual financial wellbeing.
In 2020, the G20 recognised financial literacy as a core life skill essential to empower individuals and support the financial wellbeing of both individuals and societies.
Without these skills, people can struggle to manage their money effectively, especially when life events occur, such as chronic illness or an unexpected bill to fix a car.
Yet the average financial literacy score for the 39 countries assessed by the OECD was found to be 60 out of 100 points.
Just 34% of adults reached the minimum target score for financial literacy, defined as scoring at least 70 out of 100 points.
As Oliver Morley, chief executive officer at the Money and Pensions Service (MaPS), outlined in his REBA expert view, employers have a role to play in helping to improve financial literacy.
REBA’s Financial Wellbeing Research 2024 found nearly two thirds of employers (62%) acknowledge a lack of financial literacy was a risk to the workforce’s financial wellbeing.
This is driving change in employers’ financial wellbeing offerings, with a third of employers planning to change their offering by 2026.
The need for appropriate financial wellbeing support
The research also found that more than a quarter of respondents (28%) highlighted not having access to appropriate workplace financial wellbeing support as a risk to employees’ wellbeing.
In light of this, many employers are taking steps to improve financial literacy by offering financial benefits and services. Although 53% already offer a financial wellbeing programme, a further third (29%) intend to introduce one in the next two years.
