Why UK banks need to up their financial education initiatives

Worryingly, over 90% of British consumers believe they are uneducated about personal finance and nearly half (47%) of them are looking to banks to help them, research shows.

Consumers in the UK are willing to seek help from banks despite 24% believing they have been misled by financial advice from them before.

This revelation comes from a new study commissioned by Pepper, the digital challenger bank from Israel’s Bank Leumi. In the ‘Banks’ Role in Modern Society’ report, it claims 67% of Britons feel they are not well-equipped to make financial decisions for themselves and 68% also stated they are not financially observant.

The lack of financial literacy is quite high among young women in the UK, with only 28% agreeing they are well equipped to making good financial decisions.

Pepper CEO Michal Kissos Hertzog said, “Consumers want their bank to be much more than just a safe house for cash; they want more help with their money – just like they don’t use Spotify as their music storage only, they want to discover new artists through customised data.

“The UK’s financial literacy gap is preventing many Brits from making the best possible financial decisions and digital banks have a real opportunity to empower consumers to make better money choices.

“We’ve started to see this initiative with money management apps that provide personalised spending breakdowns, helping customers be better aware of how they are spending their hard-earned cash. With a flexible digital core, there’s no reason why traditional banks cannot provide such services and more, enabling customers to take charge of their finances.”

The low levels of financial education are impacting how many consumers interact with investing. The report found 72% of consumers do not invest in stocks and shares or an investment fund, and 18% stated they did not even know how to.

Commenting on the findings Louise Hill, co-founder and COO, gohenry, the pocket money card and app for families, said: “The research results are clear – adults want access to a similar service that we offer to 6-18-year-olds. Good money management is a vital life skill that, like most life skills, is best taught when young. We have a unique opportunity to use tech for good and teach the skills that can help the next generation of adults avoid the stress that comes with a lack of financial education.”

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