It’s a little scary to think that 40% of people in the UK are making some of the most important decisions of their lives (like mortgages, pensions, and emergency savings) without really understanding how money grows or shrinks. It doesn’t seem like a number from a wealthy, developed country. And yet, that’s exactly what the most recent results from The Richmond Project show.
The charity was started by former Prime Minister Rishi Sunak and Akshata Murty. It just released the second part of its Number Nation study, which is said to be the biggest look at math and money skills ever done in the UK. More than 10,000 adults were asked to answer questions about three basic financial ideas: compound interest, inflation, and risk diversification. The survey was put together by the research company Public First. 28% of people got all three right. About 4/10 got a score of “poor” or “very poor,” which means they got none or only one right.
Take a moment to think about those numbers. Compound interest, inflation, and spreading out your risks are not very advanced economic concepts. This is what makes the difference between someone being financially stable in their fifties and being financially stressed out. Plus, more than two thirds of adults in the UK only seem to understand some of them.
The Richmond Project Financial Education Research also found a clear link between knowing about money and being able to handle it well. Adults who know a lot about money said 81% that they could pay for a sudden £1,500 expense. That number dropped to 38% for people who knew very little about money. That data point might be the only one in the whole report that really shows what’s at stake in the real world. There is a real gap between knowing and not knowing. It shows up when the boiler breaks or the car needs to be replaced and there is nothing to fall back on.
The fact that the results are different for men and women adds another layer of concern. Men did better than women in every age group that was looked at, and the difference got even bigger around midlife, which is when people are usually under the most financial stress because they have mortgages, child care costs, and are just starting to plan their retirement. There’s a feeling that this isn’t a coincidence. Statistics show that women are more likely than men to take time off work to care for others and are also more likely to make less over their lifetime. Having less knowledge about money during those years can make the disadvantage even worse in ways that are hard to fix.
The picture is also unsettling on a global level. More than 20 countries were used to compare the UK to. According to research commissioned by Boston Consulting Group, the UK is behind Germany, Switzerland, the Netherlands, Australia, and Canada. These are not hard-to-understand comparisons. In these peer economies, the UK is behind the rest.
The study also found that about 45% of school-age kids between the ages of 9 and 18 are already poor or very poor. We’re not just stuck in a generational rut because personal finance wasn’t taught in schools in the past. It’s a problem that keeps happening in classrooms right now. The data also showed an interesting link between adults who didn’t like math in school and those who didn’t know much about money. This suggests that the causes of financial anxiety may go back further than most people think.
The Government’s promise to include financial education in the national curriculum for primary and secondary schools by 2028 was welcomed by The Richmond Project. The charity says it has been working closely with officials to create this guidance. That’s a big change, but 2028 is still a ways off, and a change in the curriculum doesn’t help the millions of adults who are already making decisions without the right information.
In the end, the Richmond Project Financial Education Research makes it clear that this is not about one person failing or not being careful. The issue, as Sunak described it, is a structural one that affects people of all incomes, ages, and postal codes in a quiet way. The study tells us where the holes are. Still unanswered is the tougher question of how fast the country is willing to shut them down.
