New survey shows more Brits improving financial literacy because they don't trust money 'experts'
- Over half of Brits think that understanding how the financial system operates will help protect their assets from future banking crises and bad investments, while close to 80 per cent now believe financial literacy is necessary — to prevent bankers and other financial professionals from “taking advantage” of the public's ignorance -
- The survey of 1,000 people also found nearly two thirds of people have 'read up' on key financial concepts and terms in the last 12 months as they try to protect their money -
More Brits than ever before are taking a pro-active approach to financial education — because they no longer trust the 'experts' to look after their money.
Recent financial wrongdoings such as the LIBOR rates fixing and PPI mis-selling banking scandals have left over 80 per cent of us doubting the honesty or guidance of financial experts and institutions, according to a new survey.
As a consequence, this has led to a marked increase in the number of men and women getting to grips with the workings of the money system in a bid to protect their hard-earned cash.
Over half of Brits think that understanding how the financial system operates will help protect their assets from future banking crises and bad investments, while close to 80 per cent now believe financial literacy is necessary — to prevent bankers and other financial professionals from “taking advantage” of the public's ignorance.
The survey of 1,000 people, commissioned by educational publisher Pearson to mark the publication of irreverent financial 'wake-up' guide OUCH!, found that nearly two thirds of people have 'read up' on key financial concepts and terms in the last 12 months.
A further one in nine has or intends to enrol on a short financial literacy course or workshop to improve their financial know-how.
The study also found that the most common reasons preventing people from becoming more financially literate were perceived difficulty, with 52 per cent of people thinking the subject too complex to grasp; dullness, with 27 per cent of people finding finance too boring to tackle; lack of interest, 25 per cent; and lack of time, 23 per cent.
Personal finance expert and OUCH! author Paul Knott said the findings expose a “healthy distrust” of financial experts and institutions.
But, he added, more needs to be done to promote financial literacy in the UK and empower people to make the best decisions to protect and grow their wealth.
He said: “Money dominates the world we live in, and in many respects, how we live, but it’s a system that most of us have never thought to question, never mind understand, despite being at the sharp end of the consequences.
“Thankfully, as the survey shows, this is now changing — mainly because of high-profile financial scandals such the fixing of the LIBOR rates by Barclays and other banks, and a never-ending stream of economic doom and gloom news stories.
“Simply blaming bankers is a lazy argument because it’s the underlying system itself that is the problem, so it's encouraging to see people actively trying to get to grips with how money works, and what all the jargon actually means.
He added: “It's an old cliché but financial knowledge really does equate to power, and it doesn't have to be painful to learn. Just knowing the basics of how you are being screwed by the system, for example, can mean the difference between wealth creation and loss.”
According to a recent YouGov survey for consumer watchdog Which?, only one in five people think the Financial Service Authority (FSA) — responsible for the financial services industry and promotion of financial literacy — is doing its job properly.
The survey, published in July, also found two-thirds of people believe that measures taken by the government to reform the banking sector are not being done in the public's interest.
The new poll shows that the growing distrust of financial experts and institutions has encouraged people to stop relying on financial experts and learn for themselves how the money system really works.
It reveals that a quarter of Brits have actively investigated financial concepts and terminology for the first time in the last 12 months, while 41 per cent have been “brushing up” on their financial knowledge.
When asked the reason for their recent interest in finance, a third of Brits said they could no longer “blindly trust” financial organisations, banks and advisers to best look after their interests.
A whopping 78 per cent reckon that financial literacy is necessary to prevent banks and other financial institutions taking advantage of the public's ignorance, while 28 per cent deem knowing how money works “essential” to protect personal wealth — in case the financial system itself “collapses”.
Surfing the web emerged as the most popular way to learn about finance, with 46 per cent of respondents turning to financial websites for insight, followed by the financial sections of newspapers, at 31 per cent, and books, at 13 per cent.
Paul Knott, a business turnaround specialist, added: “This spike in interest financial literacy is very timely as our financial system is currently facing collapse. There is a massive systemic risk because the whole of the system is deeply flawed. It’s an accident waiting to happen.
“If it does come to pass then a lot of people are going to end up with very little. But those who know what to look for, and what to do to secure their money, will come through with the fewest battle scars.
“It's all down to one big choice: either wake up to this financial reality or face getting wiped out. Ignorance is bliss, except when it hurts.”
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