Let’s ‘Do One Thing’ to improve knowledge

Time to talk molney | sofiko14 - stock.adobe.com

This year’s theme is to encourage people to “Do One Thing” to improve their financial wellbeing. Then, in celebration of nailing that one thing, to talk about it and –hopefully – inspire others to do the same. For me, it’s encouraging others that is the nut that needs to be cracked.

Having helped financial brands shape their communications for a number of years, I know financial education has been the topic of much debate. Any initiative to improve people’s understanding of their finances – particularly the next generation – should be applauded.

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There is a mountain of evidence to show the negative impact of not engaging with your finances. Figures from UK savings platform Moneybox show those savers that didn’t feel financially confident had a net worth, on average, £65K lower than those that did feel confident. A shining example of how low levels of confidence can affect our finances.

These stats paint a bleak picture, and the reality is that things are only getting worse. The knowledge gap appears to be opening up rather than closing. A recent study from Santander suggests a compounding of the knowledge gap with around two-fifths of parents stating they don’t feel they know enough about money management to be able to guide their children.

Providers, policymakers and experts from across the industry have spent many an hour exploring how to help the great British public engage more with their money. Industry-led campaigns, such as Pay Your Pension Some Attention, are brilliant examples of strides being made by the pension sector to focus minds on how best to help people engage with their pension and feel informed. It’s not just a pensions gap the UK is facing, it’s also investments and the small matter of the gender pay gap which doesn’t seem to be closing anytime soon. But arguably the biggest gap of all facing our society is the knowledge gap.

The industry is working to change this and educate the public, some by forcing us to literally look in the mirror. Enter Scottish Widows Pension Mirror, which uses the might of AI to estimate your age – gulp! – then suggest the sort of pension income you should consider relative to your peers.

But there is much more to do, and initiatives such as Talk Money Week, are exactly the sorts of opportunities we need to embrace to help us all start thinking about our future, encourage us to have those difficult conversations with our families, and hopefully inspire the next generation to truly understand how to plan and – more importantly, pay for – the lifestyle they want to have not just today, but in 10, 20 and 50 years time.

So, with Talk Money Week, what will be the one thing you do to help you on your financial journey? I’m going to actually sign up both my kids for junior SIPPs and get us talking as a family about how important saving as well as spending money is!