Why is the UK, a powerful player in the global financial sector, grappling with subpar numeracy skills?
UK's Financially Challenging Numeracy Crisis: Consequences for the Financial Sector
Mastery of numeracy skills is pivotal in the competitive world of finance, where adeptness in numbers can spell the difference between success and failure. Yet, alarming deficiencies in this critical area are prevalent across the UK, jeopardizing not only individual financial well-being but also the nation's financial sector, particularly the City of London — a global powerhouse for financial services.
Andy Haldane, former Chief Economist of the Bank of England, sheds light on this growing crisis on National Numeracy Day. The UK, ranked 11th in international PISA (Programme for International Student Assessment) scores for numeracy, may appear satisfactory at first glance. However, upon closer examination, a disquieting pattern emerges.
The UK's rise up the global rankings is largely attributed to other countries' declining performance, while the lower tier of students struggling with maths remains distressingly large, with over 40% of young people in 2024 unable to pass GCSE maths. This pattern persists into adulthood, with half of the UK population demonstrating numeracy skills equivalent to an 11-year-old and a quarter grappling with rudimentary multiplication for budgeting. As the UK struggles with innumeracy, stark implications for financial literacy become evident.
According to the Financial Conduct Authority (FCA), low financial literacy reduces financial inclusion and well-being, leaving millions of people anxiously excluded from and uncertain about managing their finances. Women, young people, and parents are particularly affected by this crisis.
Research indicates that poor numeracy skills aggravate the situation, contributing to low financial literacy. As the UK's financial services sector is a vital factor in the country's growth mission, its success hinges on a financially literate and competent workforce and customer base. The intersection of the financial sector and the UK's numeracy problem necessitates collective action from the City, government, and the broader business community to promote financial capability.
This year's National Numeracy Day, organized by the charity National Numeracy, aims to raise awareness and standards of financial literacy. With numerous participants from the financial and professional services sector, businesses are supporting events aimed at encouraging hundreds of thousands of individuals to improve their number confidence. The enthusiasm for improvement is palpable, with a third of UK adults expressing a desire to boost their numeracy skills to elevate their financial competence.
Government action is essential to addressing the UK's financial illiteracy issue, as demonstrated by the ongoing work of the Money and Pension Advice Service (MAPS) and the upcoming Financial Inclusion Action Plan. The City, businesses, local, and central governments each play a pivotal role in ensuring the UK maintains a financially secure and confident workforce and customer base, underpinning the success of its financial services sector both domestically and internationally.
- Improving business competitiveness in the financial sector may hinge on efficient budgeting, a skill that requires adequate numeracy skills, as more than a quarter of the UK population struggles with rudimentary multiplication for this purpose.
- In the context of the growing financially challenging numeracy crisis and low financial literacy in the UK, education-and-self-development programs focused on numeracy and finance could play a crucial role in developing a competent workforce and customer base, enhancing the nation's financial sector overall.
