New research from UCL and University of Cambridge has shown that adults in England and Northern Ireland (NI) perform worse on everyday financial numeracy tasks than adults in many other developed countries – even when using a calculator.
The study finds that one-in-three adults in England and NI cannot work out the correct change from a shopping trip, four-in-ten could not correctly apply a simple discount to an everyday household product they might buy when shopping, and more than half could not interpret a graph containing basic financial information.
Mike Ellicock, National Numeracy Chief Executive appeared on breakfast TV to discuss the issue. He commented that: “This research is remarkably consistent with findings published by the Money Advice Service last year which showed that 18m adults across the UK lack the ‘number sense’ to manage their money well. So with the evidence mounting up, we need to look at how the millions of pounds currently being spent to improve financial capability are being used. If you’re not numerate you can’t be financially capable, so initiatives that don’t at least check whether people can do the kind of basic maths highlighted here are likely to fail.”
As Professor Jerrim, co-author of the study states “We all need to be able to conduct basic financial calculations in order to make rational well-informed decisions. This includes how much we should save into our pensions, understanding the financial implications of borrowing money from payday loan sites, through to whether we can really afford to buy a particular house. Our results bring into question how many adults in England really have the skills to make such complex financial decisions. The reality is that many adults struggle to complete even quite basic financial tasks.”
The financial skills of adults across the world. New estimates from PIAAC is the latest working paper to be published by the University of Cambridge and the UCL IOE's Department of Quantitative Social Science (QSS). The paper will be available from johnjerrim.com on March 15th 2018.