GoHenry and Wilson Wright asked CBI Economics to look at the key aspects of financial literacy, the benefits from improving it, and how government and business can go further to improve financial skills amongst children and young people.
The level of financial literacy each of us have is largely governed by our individual characteristics, parental influence, and schooling,
For businesses, financial literacy brings employees with strong numeric skills, better prepared for the world of work and likely more productive. Our research found that financial literacy skills are highly transferable and can boost entrepreneurship as well.
For individuals, the ability to make informed decisions is a key determinant of lifelong financial outcomes, savings, income, borrowing and spending behaviours, as well as investment and wealth accumulation – ‘a core life skill’.
Financial behaviour can be hard to influence because of a life-long process of ‘financial socialisation’ by the society that people live in. It is a complex ‘soup’ requiring targeted intervention and innovation. For example, children’s attitudes to money are already well developed by the age of seven.
Financial literacy in the UK falls short of rates observed elsewhere in the Organisation for Economic Co
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